If you want to know how to make a journal entry in QuickBooks Online, understanding the purpose of journal entries is just as important as knowing which buttons to click. A QuickBooks Online journal entry is a manual accounting transaction that lets you debit one account and credit another without using common transaction forms such as invoices, bills, checks, or sales receipts. Businesses and accounting professionals may use journal entries for depreciation, accounting adjustments, corrections, reclassifications, accrued expenses, transfers between certain accounts, or other bookkeeping situations where a standard QuickBooks transaction form is not appropriate. Because journal entries directly affect general ledger accounts, they need to be entered carefully. Every journal entry must balance, which means the total debit amount must equal the total credit amount. QuickBooks provides fields for the accounts, debit and credit amounts, descriptions, names, and memo information so you can create a clear accounting trail. Learning the correct QuickBooks journal entry process helps protect the accuracy of your financial statements and account balances.
When Should You Use A Journal Entry?
A journal entry is useful for accounting adjustments that do not fit naturally into another QuickBooks form.
Intuit identifies uses such as adjusting account balances, tracking depreciation, correcting errors, or moving amounts between appropriate accounts.
However, a journal entry should not automatically replace a normal transaction form.
If you are recording a customer invoice, vendor bill, expense, payment, check, or sales receipt, the relevant QuickBooks form often provides better tracking.
This is particularly important for transactions connected to customers, vendors, inventory, sales tax, accounts receivable, accounts payable, or payroll.
When you are uncertain whether a manual journal entry is appropriate, consult an accountant before posting it.
How To Create A Journal Entry In QuickBooks Online
Before starting, determine which accounts should be affected, how much should be debited, and how much should be credited.
Then follow these steps:
- Sign in to QuickBooks Online.
- Select + Create.
- Choose Journal entry.
- On the first line, select the first account from the Account field.
- Enter the amount in either the Debit or Credit column.
- Move to the next line.
- Select the other account involved.
- Enter the balancing amount in the opposite column.
- Add additional lines if more accounts are involved.
- Enter descriptions or memo information that explains the reason for the entry.
- Confirm that total debits equal total credits.
- Select Save and close or Save and new.
These steps reflect Intuit’s current QuickBooks Online journal entry workflow.
If your QuickBooks interface looks slightly different, use the in-app search feature because QuickBooks periodically updates its layout.
Understanding Debits And Credits
The most important rule is simple: total debits and total credits must be equal.
For example, suppose you need to record a $1,000 accounting adjustment involving two accounts.
One account may receive a $1,000 debit while another receives a $1,000 credit.
Your journal entry would therefore contain:
Account A: Debit $1,000
Account B: Credit $1,000
Total debits equal $1,000, and total credits equal $1,000.
The entry is balanced.
The more difficult question is deciding which account should receive the debit and which should receive the credit. That depends on the account types and the economic substance of the transaction.
Assets, liabilities, equity, income, and expense accounts do not all respond the same way to debits and credits.
If you are unfamiliar with double-entry accounting, avoid guessing. Intuit also recommends understanding debit and credit basics or consulting an accountant when you are uncertain about the accounts involved.
Add A Clear Memo And Description
A journal entry may make perfect sense when you create it and become confusing six months later.
That is why descriptions matter.
Instead of entering a vague memo such as “adjustment,” explain the purpose clearly.
For example:
“Record monthly equipment depreciation for June.”
Or:
“Reclassify office software expense entered in incorrect account.”
Good documentation helps you, your bookkeeper, accountant, or auditor understand why the entry exists.
If supporting documentation is available, keep it with your accounting records so the journal entry can be traced back to the reason for the adjustment.
Clear records become particularly useful during month-end review, year-end closing, tax preparation, and financial statement analysis.
How To Review Journal Entries
After creating journal entries, review them periodically to make sure the accounts and amounts remain correct.
QuickBooks Online provides a Journal report that can be used to review posted journal entries. Intuit’s current instructions direct users to the Reports area, search for the Journal report, and review the entries posted to the accounts.
When reviewing an entry, check:
- Journal date
- Accounts used
- Debit amounts
- Credit amounts
- Memo
- Description
- Customer or vendor names when applicable
- Supporting documentation
A simple typo in the amount or account selection can affect financial statements even when the journal entry technically balances.
Common Journal Entry Mistakes To Avoid
One common mistake is creating a journal entry without understanding the accounting effect.
Another is using manual journal entries when a standard QuickBooks transaction should have been used.
Also watch for:
- Posting to the wrong account.
- Using the wrong journal date.
- Reversing debit and credit amounts.
- Entering duplicate adjustments.
- Leaving the memo blank.
- Posting directly to sensitive accounts without understanding the consequences.
- Creating entries to force financial statements to match a desired number.
A balanced entry is not necessarily a correct entry. The accounts, date, purpose, and amounts must also be accurate.
Frequently Asked Questions
Do Journal Entries Have To Balance?
Yes. Total debits and total credits must be equal.
Where Is Journal Entry In QuickBooks Online?
Select + Create, then choose Journal entry.
Can I Use Journal Entries To Correct Errors?
Journal entries can be used for certain accounting corrections, but the appropriate correction depends on the original transaction and affected accounts.
How Can I See My Journal Entries?
Open Reports and run the Journal report to review journal entries posted to your accounts.