The practicing accountant will need to create a broad array of journal entries over the course of a typical fiscal year. The following journal entry examples are intended to provide an outline of the general structure of the more common entries encountered. It is impossible to provide a complete set of journal entries that address every variation on every situation, since there are thousands of possible entries.
Each item on the list states the topic, the relevant debit and credit, and additional comments as needed.
Revenue journal entries:
- Sales entry. Debit accounts receivable and credit sales. If a sale is for cash, then the debit is to the cash account instead of the accounts receivable account.
- Allowance for doubtful accounts entry. Debit bad debt expense and credit the allowance for doubtful accounts. When actual bad debts are identified, you then debit the allowance for doubtful accounts and credit the accounts receivable account.
Expense journal entries:
- Accounts payable entry. Debit the asset or expense account to which a purchase relates and credit the accounts payable account. When an account payable is paid, debit accounts payable and credit cash.
- Payroll entry. Debit the wages expense and payroll tax expense accounts, and credit the cash account. There may be additional credits to account for deductions from benefit expense accounts, if employees have permitted deductions for benefits to be taken from their pay.
- Accrued expense entry. Debit the applicable expense and credit accrued expenses. This entry is usually reversed automatically in the following period.
- Depreciation entry. Debit depreciation expense and credit accumulated depreciation. These accounts may be categorized by type of fixed asset.
- Petty cash entry. When petty cash is to be replenished, debit the expenses to be charged, as stated on received vouchers, and credit the cash account for the amount of cash to be used to replenish the petty cash box.
- Cash reconciliation entry. This entry can take many forms, but there is usually a debit to the bank fees account to recognize charges made by the bank, with a credit to the cash account. There may also be a debit to office supplies expense for any check supplies purchased and paid for through the bank account.
- Prepaid expense adjustment entry. When recognizing prepaid expenses as expenses, debit the applicable expense account and credit the prepaid expense account.
- Obsolete inventory entry. Debit cost of goods sold and credit the reserve of obsolete inventory. When inventory is actually disposed of, debit the reserve and credit inventory.
- Fixed asset addition entry. Debit the applicable fixed asset account and credit accounts payable.
- Fixed asset derecognition entry. Debit accumulated depreciation and credit the applicable fixed asset account. There may also be a gain or loss on the derecognition.
See the preceding accounts payable and accrued expense entries.
- Dividend declaration. Debit the retained earnings account and credit the dividends payable account. Once dividends are paid, this is a debit to the dividends payable account and a credit to the cash account.
- Stock repurchase. Debit treasury stock and credit cash. There are alternative methods for recording treasury stock. See the treasury stock accounting article for more information.
These journal entry examples are only intended to provide an overview of the general types and formats of accounting entries. For more complex journal entries, it is best to obtain the advice of the company's auditors.