- Journal entry is an entry to the journal.
- Journal is a record that keeps accounting transactions in chronological order, i.e. as they occur.
- Ledger is a record that keeps accounting transactions by accounts.
- Account is a unit to record and summarize accounting transactions.
- All accounting transactions are recorded through journal entries that show account names, amounts, and whether those accounts are recorded in debit or credit side of accounts.
Double-Entry Recording of Accounting Transactions
- To record transactions, accounting system uses double-entry accounting.
- Double-entry implies that transactions are always recorded using two sides, debit and credit.
- Debit refers to the left-hand side and credit refers to the right-hand side of the journal entry or account.
- The sum of debit side amounts should equal to the sum of credit side amounts.
- A journal entry is called "balanced" when the sum of debit side amounts equals to the sum of credit side amounts.
