Companies that take themselves their accounts are made to record the accounting entries on their books and, especially, in their newspapers. The accounting entries are the raw material of accounting , they are essential to produce quality financial information, which is why it is necessary to understand what it is. Compta-Facile answers here the question: what is an accounting entry ?
Definition of an accounting entry
The objective of accounting is to produce reliable, comparable, sincere, regular and clear financial information. For this, any flow impacting the company, ie its assets or business, must be recorded in the accounts. This is the very definitionof an accounting entry : it reflects the financial impact of a flow in the company’s accounts .
An accounting entry therefore constitutes the financial transcription of a flow in the accounts of an enterprise . The flows can be of any kind: financial flows and / or economic flows, current flows and / or exceptional flows, etc.
All the accounting entries of an enterprise will feed into its financial statements which are the balance sheet, the income statement and the appendix.
- Characteristics of an accounting entry
- Presentation of an accounting entry
An accounting entry consists of at least two lines ; Each line being broken down into several columns and having to contain different information.
Two columns must attract the attention of the input operator: the “flow” column and the “credit” column. Indeed, it will have to burst there its operation according to the nature of the operation and the meaning of it. An accounting entry necessarily includes at least a debit and a credit.
Once the accounting entry is entered, the total of the debits must necessarily be equal to the total of the credits . This is the fundamental mechanism of the dual part , which is the basis of business accounting. It is then said that the accounting entry is balanced .
Justification for an accounting entry
All accounting entries must be accompanied by a supporting document (in other words, accounting documents ). For purchases and sales, it is usually the invoices that perform this function. For the bank, it is bank statements. For the crate, it is the fog. For payroll records, it is payroll slips and payrolls.
It is generally advisable to number them correctly and to post this number within the accounting entry in order to be able to find the document quickly if necessary (for invoices, it will be possible to retain, by Example, the invoice number as it appears).
Composition of an accounting entry
Any accounting entry must contain at least the following information :
- The date of the transaction (usually the invoice date);
- The reference of the proof of the operation (number allowing to identify the document);
- The wording of the operation (description of flow);
- The active accounts in the transaction ( cash charges );
- The amount of the transaction (valuation of the flow);
- And the sense of flow (flow if it represents a job, credit if it constitutes a resource).
To understand the distinction between a debit and a credit:
- What is a debit in accounting ?
- What is a credit in accounting ?
Recording an accounting entry
An accounting entry is saved in a document called an accounting journal . In practice, there is usually a centralized journal that groups different auxiliary journals (they are created at the choice of the company and especially according to its needs). Here are the ones that are generally open:
- The purchasing log grouping the records of purchase invoices,
- The sales journal gathering records of sales invoices,
- The bank journal, which contains the records of bank statements,
- The cash journal containing the cash register records (cash in particular),
- The payroll, which contains records of payroll records,
- The journal of miscellaneous transactions gathering the records of VAT returns, inventory entries and otherregularization entries .
When the company uses accounting software , its logs are dematerialized and managed automatically. They are automatically compiled and centralized in the general journal. For more information about how to register: how to write a book entry ?