What is a journal entry?
A journal entry is an entry made into the general ledger that indicates financial transactions. The primary function of a journal entry is to provide a record of financial history in one place. Journal entries play an important role in creating accurate financial reports for your business.
Transactions recorded as journal entries likely exist elsewhere in your business records. For example, a buyer returning items will be logged in your return and inventory management systems. But because a return will affect profits, it will be additionally recorded as a journal entry. This may seem unnecessary but keeping meticulous financial records is of the utmost importance.
To make your life easier, it's best to use software that will allow you to create automatic journal entries. This way, no valuable financial information will slip through the cracks.
Helpful resources:
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