Importance of Journal Entries
Unit 2 Alternate Seminar Assignment
AC499-02
MaryJo Velez
In this paper, we are going to define journal entries. We will discuss the importance of the journal entries. Next, we will talk about their effects on the financial statements. Finally, we will summarize what we have learned about journal entries. A journal entry is the record of financial transactions recorded into a journal. This journal gives details about all the financial transactions of a business and tells which accounts these transactions affect. The transactions are initially recorded in the journal using the double-entry or single-entry method of bookkeeping. Journal entries are typically entered in chronological order and debits get entered before credits. Journal entries are important because they give you a cohesive record of the day-to-day financial transactions. They allow you to follow the money for the organization. Journal entries help satisfy the tax authorities and keep track of the cash flow or profit for the organization. These journal entries are some of the most important financial records for an organization. Journal entries effect the financial statements in many ways. Journal entries are used when you have expected income or deferred expenses. When using these entries for expected income, you need to make sure that you correctly add it so that your assets will increases properly. For example, a franchise owner knows that each month they will receive factory dollars but usually don’t know the exact amount until they receive a monthly statement that usually comes at the end of the month. This amount needs to be used to adjust the anticipated income to increase the asset base.
Deferred expenses are also reported using journal entries. When you purchase equipment or inventory, or have rent, mortgages, or fees that are deferred to a future time period, you must make adjust entries in the journal to keep track of these expenses.
AC499-02
MaryJo Velez
In this paper, we are going to define journal entries. We will discuss the importance of the journal entries. Next, we will talk about their effects on the financial statements. Finally, we will summarize what we have learned about journal entries. A journal entry is the record of financial transactions recorded into a journal. This journal gives details about all the financial transactions of a business and tells which accounts these transactions affect. The transactions are initially recorded in the journal using the double-entry or single-entry method of bookkeeping. Journal entries are typically entered in chronological order and debits get entered before credits. Journal entries are important because they give you a cohesive record of the day-to-day financial transactions. They allow you to follow the money for the organization. Journal entries help satisfy the tax authorities and keep track of the cash flow or profit for the organization. These journal entries are some of the most important financial records for an organization. Journal entries effect the financial statements in many ways. Journal entries are used when you have expected income or deferred expenses. When using these entries for expected income, you need to make sure that you correctly add it so that your assets will increases properly. For example, a franchise owner knows that each month they will receive factory dollars but usually don’t know the exact amount until they receive a monthly statement that usually comes at the end of the month. This amount needs to be used to adjust the anticipated income to increase the asset base.
Deferred expenses are also reported using journal entries. When you purchase equipment or inventory, or have rent, mortgages, or fees that are deferred to a future time period, you must make adjust entries in the journal to keep track of these expenses.