A journal entry is the record of a single financial transaction in double-entry bookkeeping, with equal debits and credits posted to two or more accounts.
Every transaction begins life as a journal entry: a dated record naming the accounts affected, the amounts, and whether each is a debit or a credit. Because bookkeeping is double-entry, the debits in every entry must equal the credits, which keeps the books in balance.
Most routine entries are created automatically by accounting software when you record a sale or pay a bill. Manual journal entries are used for adjustments, depreciation, accruals, corrections, and are a common focus of year-end work and CRA review because they can move income between periods.
To record $1,000 of monthly depreciation, the bookkeeper posts a journal entry: debit Depreciation Expense $1,000, credit Accumulated Depreciation $1,000. Debits equal credits, so the books stay balanced.
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