This journal entry template will help you construct properly formatted journal entries and provide a guideline for what a general ledger should look like.
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Entering Journal Entries
A journal is the company’s official accounting record of all transactions that are documented in chronological order. While most modern companies use accounting software to enter journal entries, journals were the primary way of recording transactions in the past. While no longer common, understanding how to do a manual journal entry is still important when learning the fundamentals of accounting.
For every single journal entry, debits and credits must be equal to maintain balance in the accounting equation (assets = liabilities + shareholders’ equity). Therefore, when conducting journal entries, you will need to keep in mind four factors:
Which accounts are affected by the transaction
Whether each account is increased or decreased
How much each account is changed by
Ensuring that the accounting equation maintains balance
The best way to remember how to do journal entries and how each account is affected is through practice. This idea can be extended to all accounting fundamentals, as there are many accounting rules that need to be upheld.
Without proper journal entries, a company’s can quickly find its financial statements in disarray, with many inaccuracies. Use CFI’s journal entry template to help you practice and maintain accuracy with your journal entries.
Example of a Journal Entry – Purchasing Inventory
Purchased inventory costing $75,000 for $5,000 in cash and the remaining $70,000 on the account.
DR Inventory 75,000
CR Cash 5,000
CR Accounts Payable 70,000
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Below is a break down of subject weightings in the FMVA® financial analyst program. As you can see there is a heavy focus on financial modeling, finance, Excel, business valuation, budgeting/forecasting, PowerPoint presentations, accounting and business strategy.
A well rounded financial analyst possesses all of the above skills!
Additional Questions & Answers
CFI is the global institution behind the financial modeling and valuation analyst FMVA® Designation. CFI is on a mission to enable anyone to be a great financial analyst and have a great career path. In order to help you advance your career, CFI has compiled many resources to assist you along the path.
In order to become a great financial analyst, here are some more questions and answers for you to discover:
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