CBSE Class 11 » CBSE Class 11 Study Materials » Accounting » Writing of Journal Entries

Writing of Journal Entries

In this article, we will learn about journal entries, writing journal entries, format and rules.

The act of recording or keeping track of any financial or non-financial action is known as a journal entry. An accounting journal keeps track of transactions and shows the debit and credit balances of various accounts in a business. A debit or a credit can have to be made for each entry in the journal. Otherwise, if the total of the debits does not match the total of the credits, then the journal entry is considered imbalanced. 

Types of Journal Entries

Opening Journal Entry

It is forward from the end of the previous accounting period at the start of a new accounting period. The opening balance in a company’s account at the start of a new financial period is the amount of capital or funds in the account.It’s the very first transaction in the books.The closing balance at the end of one month or year becomes the starting balance at the start of the next month or accounting year in an operational firm. The opening balance could be on the credit or negative side of the ledger, depending on the situation.

Clousing Journal Entry

A closing entry is a journal entry that transfers balances from a temporary account to a permanent account at the end of accounting period.Companies use closing entries to zero down temporary account balances (accounts that show balances for a single accounting period). The corporation places these sums into permanent accounts on the balance sheet as a result of this action. These long-term accounts show a company’s financials throughout time

Adjusting Journal Entry

An adjusting entry is used at the end of each month to make modifications to the financial statements to bring them into compliance with the applicable accounting framework, such as Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS) (IFRS). If your organisation uses the accrual method of accounting, you may, for example, accrue unpaid salaries at month’s end. 

Compound Journal Entry

A compound journal entry is one with more than two lines of information. It’s typically used to keep track of multiple transactions or complex transactions. Because it entails the recording of multiple tax liabilities and payroll deductions, the journal entry to record payroll, for example, frequently has many lines. 

Reversing Journal Entry

A reversing entry is an adjusting entry that is reversed as of the start of the next period, usually because an expense that was supposed to be accumulated in the previous period is no longer needed. As a result, in the following period, a wage accrual from the prior period is reversed, and an actual payroll expense replaces it. 

Format of Journal Entries

The following are the essential aspects of the journal entry format:

  1. A journal entry number and date may appear on a header line. The number serves as an index for the journal entry, allowing it to be correctly saved and retrieved. 
  2. The account number and account name for which the entry is made are listed in the first column. If it’s for a credited account, this field is indented. 
  3. The debit amount to be entered is in the second column. 
  4. The credit amount to be entered is in the third column. 
  5. A footer line can also offer a brief explanation of why the entry was made. Because there are so many journal entries, it’s easy to forget why each one was made. It is highly advised that you make an entry in the footer line. 

A journal entry’s structural rules are that it must include at least two line items and that the total amount written in the debit column equals the total amount put in the credit column. 

Rules of Journal Entry

The Personal, Real, and Nominal account is the most common classification, and the golden rules are as follows:

Personal Account

A personal account is one that belongs to a person, a business, or an institution such as a bank. 

  1. Credit the giver, debit the receiver
  2. Debtors, creditors, and other accounts come into this category.

Real Account

Inventory, cash, bank accounts, plant and machinery, and other tangible and intangible goods are all included in the real account. 

  1. What comes in is debited, and what leaves is credited.
  2. Cash, bank balances, stock of goods, Purchase, Sales, Plant & Machinery, and other accounts fall into this category. 

Nominal Account

Profits, losses, revenues, and gains are all recorded in this account. 

  1. All losses and expenses should be debited, and all gains and earnings should be credited.
  2. Profit, Interest, Dividend, and Depreciation are all accounts that come under this category. 

Tracking Journal Entries

Financial reporting is an important aspect of accounting. The act of providing a company’s financial statements to management, investors, the government, and other users in order to assist them in making better financial decisions is known as financial reporting. 


Depreciation and bond amortisation are examples of recurring items that can be recorded in journal entries. Journal entries are frequently entered in a distinct module from accounts payable, which normally has its own sub-ledger that has an indirect impact on the general ledger. As a result, journal entries affect the general ledger account balances directly. A correctly documented journal entry includes the correct date, the amount(s) to be debited, the amount to be credited, the transaction’s narration, and a unique reference number (i.e. check number). 


Frequently Asked Questions

Get answers to the most common queries related to the CBSE Class 11 Examination Preparation.

What is the purpose of a journal?

Answer.  A journal entry is a record of a company’s financial transactions ...Read full

What is a general Journal Entry in accounting?

Answer.  In a double entry accounting ...Read full

Name the three types of Journal entries.

Answer. Compound, adjusting, and reversing journal entries are the three main categories.

What are the 4 parts of a journal entry?

Answer.  The date, the amount of the debit and credit, the titles of the acco...Read full

What is the difference between ledger and journal?

Answer. A journal is a separate book of account that keeps track of transactions. A ledger is a basic accounting boo...Read full