Whether you do your own accounting or outsource to an accounting firm, it’s important to understand some of the basics of Quickbooks Online (QBO).
A journal entry in QBO could be used for a few reasons, and this week, Tyler explains when and how to use journal entries to stay on top of your double entry accounting.
- In double entry accounting, your Chart of Accounts relates to itself by debiting one account while it credits another. Any entry, whether manual or automated, should balance itself between these two areas.
- Think of journal entries as manual manipulation of your accounting. While automatic entries may come from your sales channels, journal entries can be done by the accountant or bookkeeper manually.
- Account reconciliation is one of the most important uses for a manual journal entry. One way your accountant may use journal entries is to correct inventory counting and reconcile your COGS.
- QBO allows you to attach a spreadsheet or other document to any journal entry as proof of your accounting. This is important in case of an audit or when presenting to an investor, as it helps support your decision to add the journal entry.
- You can audit entries in QBO by clicking on the figure in your Balance Sheet or P&L. This allows you to see a log of any edits made to the account by any authorized user.
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