Journal Entry Examples: General, Accounts Receivables, more

In the context of accounting, journal entry examples refer to the systematic recording of financial transactions in a company’s accounting system.

Each transaction is initially recorded in a journal before being transferred to the general ledger.

Journal entries follow a standardized format, typically including the date, accounts involved, amounts debited or credited, and a brief description of the transaction.

Journal entries in accounting are systematic because they follow a structured and organized process for recording financial transactions.

This systematic approach ensures consistency and accuracy in financial record-keeping.

Each entry adheres to a standardized format, including specific details such as the date, accounts involved, and amounts debited or credited.

The systematic nature of journal entries facilitates a clear and uniform method for documenting business transactions, which, in turn, enables easy tracking, analysis, and reporting of financial activities.

This consistency is essential for financial transparency, compliance with accounting principles, and the reliable generation of financial statements

What is a journal entry?

A journal entry is a record in accounting that systematically captures and documents financial transactions of a business.

It typically includes the date, accounts affected, and the corresponding debits and credits associated with a specific transaction.

Journal entries serve as the foundational step in the accounting process, providing a chronological and organized trail of a company’s financial activities.

They are essential for maintaining accurate financial records and are later used to create financial statements


A bookkeeping journal entry is a record of a financial transaction in a company’s accounting system.

It captures the details of a business transaction by documenting the debit and credit aspects of affected accounts.


In accounting, a journal entry is a systematic and chronological recording of financial transactions within a company’s accounting system.

Each entry includes essential details such as the date, accounts affected, and corresponding debits and credits.

General – Journal Entries Example

In accounting, general journal entries encompass all journal entries for a period, e.g. month.

general journal entries examples

Double Journal Entry

Double-entry accounting is a fundamental principle in accounting that follows the concept of recording every financial transaction in at least two accounts.

Each transaction involves a dual effect, known as a “double journal entry,” where there is a debit entry and a corresponding credit entry of equal value.

In this system, the total debits must always equal the total credits, ensuring that the accounting equation (Assets = Liabilities + Equity) remains balanced.

The double-entry system provides a comprehensive and accurate way to track the financial activities of a business, allowing for a clear understanding of its financial position and performance.

Accounts receivable and Sales

Here is the accounts receivable journal entry example.

Let’s consider a scenario where a business makes a sale on credit.

The journal entry for this transaction would typically involve the following accounts:

  1. Accounts Receivable: This is the asset account that represents the amount owed to the business by the customer.
  2. Sales or Service Revenue: This is the revenue account that represents the income earned by the business from the sale of goods or services.

Here’s an example:

Suppose a business sells $1,000 worth of products on credit.

The journal entry would be:

Date         Account                  Debit ($)     Credit ($)
[Date]       Accounts Receivable        1,000
             Sales Revenue                           1,000

In this entry:

  • Accounts Receivable is debited (increased) by $1,000 because the customer now owes the business that amount.
  • Sales Revenue is credited (increased) by $1,000 because the business has earned that amount in revenue.

This entry reflects the increase in both the asset (accounts receivable) and the revenue accounts. When the customer eventually pays, another journal entry would be made to decrease accounts receivable and increase cash or another payment method.

Suppose the customer pays $500 of their accounts receivable.

Date         Account                  Debit ($)     Credit ($)
[Date]       Cash (or Bank)              500
             Accounts Receivable                    500

Due to Due From

Due to” and “due from” journal entries typically arise in intercompany transactions when one entity owes money to another within the same corporate group.

These entries help track and reconcile the amounts owed between the entities.

Here are examples of “due to” and “due from” journal entries:

Example 1: Due To/Due From between Subsidiary and Parent Company:

  1. When the Subsidiary owes money to the Parent Company:
    • Debit: Cash
    • Credit: Due To Parent Company (Liability Account on Subsidiary’s Books)
  2. When the Parent Company is owed money by the Subsidiary:
    • Debit: Due From Subsidiary
    • Credit: Cash

Accounts Payable

Let’s consider a simple example of a purchase on credit, leading to an accounts payable journal entry:

Scenario: A business purchases $5,000 worth of goods on credit from a supplier.

Journal Entry:

  1. At the time of the purchase:
    • Debit: Inventory or Expense Account (e.g., Purchases) – $5,000
    • Credit: Accounts Payable – $5,000

This entry reflects the increase in the assets (inventory) or expenses on the left side and the increase in liabilities (accounts payable) on the right side.

The accounts payable account represents the amount the business owes to its supplier for the goods purchased on credit.

Here’s the breakdown:

  • The “Debit” side increases the value of either the inventory (if the goods are for resale) or an expense account (if the goods are for internal use or consumption).
  • The “Credit” side increases the liability in the form of accounts payable, indicating that the business has a short-term obligation to pay the supplier.

After the payment is made:

  1. When the business pays the supplier:
    • Debit: Accounts Payable – $5,000
    • Credit: Cash or Bank – $5,000

This entry reflects the decrease in the accounts payable on the left side, indicating that the business has fulfilled its obligation by making the payment.

The right side shows the reduction in cash or bank balance, representing the outflow of funds to settle the payable.

Fixed Assets

Let’s consider a journal entry fixed asset example of acquiring a fixed asset, such as equipment, through a cash purchase.

The journal entry for this transaction typically involves debiting the fixed asset account and crediting the cash account.

Scenario: A business purchases equipment for $10,000 in cash.

Journal Entry:

  1. At the time of the equipment purchase:
    • Debit: Equipment – $10,000
    • Credit: Cash – $10,000

This entry reflects the increase in the asset (equipment) on the left side and the decrease in cash on the right side.

The fixed asset account (Equipment) represents the cost of the long-term asset, and the cash account reflects the reduction in the company’s available funds due to the purchase.

Here’s the breakdown:

  • The “Debit” side increases the value of the Equipment account, indicating the acquisition of a fixed asset.
  • The “Credit” side shows the reduction in the Cash account, as the business paid for the equipment in cash.

This journal entry accurately records the transaction, and the equipment’s cost will be reflected on the balance sheet as a fixed asset.

Closing Journal Entry Examples

Closing journal entries are made at the end of an accounting period to transfer the balances of temporary accounts (revenue, expenses, and dividends) to the permanent equity accounts.

The end of an accounting period usually means the year-end.

This process helps reset the temporary accounts for the next accounting period.

Here are examples of closing journal entries:

  1. Closing Revenue Accounts:
    • Debit: Revenue Accounts (e.g., Sales, Service Revenue)
    • Credit: Income Summary
    This entry transfers the credit balances of revenue accounts to the Income Summary account.
  2. Closing Expense Accounts:
    • Debit: Income Summary
    • Credit: Expense Accounts (e.g., Salaries Expense, Rent Expense)
    This entry transfers the debit balances of expense accounts to the Income Summary account.
  3. Transferring Net Income to Retained Earnings:
    • Debit: Income Summary
    • Credit: Retained Earnings
    This entry transfers the net income (or loss) from the Income Summary account to the Retained Earnings account.
  4. Closing Dividends:
    • Debit: Retained Earnings
    • Credit: Dividends
    This entry closes the dividends account by transferring its balance to the Retained Earnings account.

After these closing entries, the temporary accounts (Revenue, Expenses, and Dividends) will have zero balances, and the permanent accounts (Assets, Liabilities, and Equity) will reflect the final results of the accounting period.

The Income Summary account, having served its purpose, will also have a zero balance.


At the end of each accounting period (e.g., a month, year), the company would record a depreciation journal entry to reflect the depreciation expense:

Suppose a company purchases a piece of machinery for $10,000 with an estimated useful life of 5 years and no salvage value.

Depreciation expense  = $10,000/5 = $2,000

In this example:

Depreciation Expense              $2,000
        Accumulated Depreciation            $2,000

This entry reduces the value of the machinery on the balance sheet and recognizes the portion of the asset’s cost that has been used up during the accounting period as an expense on the income statement.

After the first year, the book value of the machinery on the balance sheet would be $10,000 (original cost) – $2,000 (accumulated depreciation) = $8,000, and this process would continue each year until the end of the asset’s useful life.

Jason John Wethe
Latest posts by Jason John Wethe (see all)

Free Accounting Training

How I prepare & generate financial Statements in under an hour.

Email Address *

Scroll to Top