Accounting Guide
A journal entry records a business transaction using debit and credit lines. A complete journal entry should have total debits equal to total credits.
Quick answer
A journal entry records the accounts affected by a transaction.
Each journal entry usually includes a date, account names, debit amounts, credit amounts, and a short description.
Debits go on the left side, credits go on the right side, and total debits should equal total credits.
Core rule
This is the foundation of double-entry accounting. A journal entry can have more than two lines, but the total debit amount must equal the total credit amount.
A balanced journal entry checks the math, but it does not always prove the account choices are correct.
Format
| Date | Account | Debit | Credit |
|---|---|---|---|
| Jan 1 | Cash | RM 1,000 | - |
| Jan 1 | Service Revenue | - | RM 1,000 |
Cash is debited because cash increased.
Service Revenue is credited because revenue increased.
The entry balances because total debits and total credits are both RM 1,000.
Rules reminder
| Account Type | Increases With | Decreases With |
|---|---|---|
| Asset | Debit | Credit |
| Expense | Debit | Credit |
| Dividends/Drawings | Debit | Credit |
| Liability | Credit | Debit |
| Equity | Credit | Debit |
| Revenue | Credit | Debit |
If this still feels slippery, learn the full debit vs credit rules or use the Debit/Credit Checker.
Process
Examples
Scenario: A business earns RM 1,000 cash from providing a service.
| Account | Debit | Credit |
|---|---|---|
| Cash | RM 1,000 | - |
| Service Revenue | - | RM 1,000 |
| Total | RM 1,000 | RM 1,000 |
Scenario: A business pays RM 800 cash for rent.
| Account | Debit | Credit |
|---|---|---|
| Rent Expense | RM 800 | - |
| Cash | - | RM 800 |
| Total | RM 800 | RM 800 |
Scenario: A business buys equipment for RM 3,000 cash.
| Account | Debit | Credit |
|---|---|---|
| Equipment | RM 3,000 | - |
| Cash | - | RM 3,000 |
| Total | RM 3,000 | RM 3,000 |
Scenario: The owner invests RM 5,000 cash into the business.
| Account | Debit | Credit |
|---|---|---|
| Cash | RM 5,000 | - |
| Owner's Capital | - | RM 5,000 |
| Total | RM 5,000 | RM 5,000 |
Scenario: A business buys RM 600 of supplies but will pay later.
| Account | Debit | Credit |
|---|---|---|
| Supplies | RM 600 | - |
| Accounts Payable | - | RM 600 |
| Total | RM 600 | RM 600 |
Multiple lines
Yes. A journal entry can have multiple debit or credit lines.
The total debit amount still needs to equal the total credit amount.
Scenario: a customer pays RM 1,000 total: RM 700 in cash and RM 300 still owed.
| Account | Debit | Credit |
|---|---|---|
| Cash | RM 700 | - |
| Accounts Receivable | RM 300 | - |
| Service Revenue | - | RM 1,000 |
| Total | RM 1,000 | RM 1,000 |
Mistakes
Related guides
Journal entries are posted to ledger accounts. Those ending ledger balances can then be checked in a trial balance.
To continue, learn how a trial balance works and review why a trial balance may not balance.
Tools
Use it to check whether debit and credit totals match.
Use it to check whether an account should be debited or credited.
Use it to check whether total ledger debit and credit balances match.
Use it to review assets, liabilities, and equity.
Checklist
FAQ
A journal entry records a business transaction by showing the accounts affected, the debit amounts, and the credit amounts.
A basic journal entry usually includes the date, account names, debit column, credit column, and a short explanation.
Debits and credits need to balance because double-entry accounting records equal debit and credit effects for each complete transaction.
Identify the account type and whether it increased or decreased. Assets and expenses usually increase with debits.
Identify the account type and whether it increased or decreased. Liabilities, equity, and revenue usually increase with credits.
Yes. A journal entry can have multiple debit or credit lines as long as total debits equal total credits.
Yes. A balanced journal entry checks the math, but the wrong account or wrong classification can still be used.
A journal entry records one transaction. A trial balance lists ledger account balances to check whether total debit and credit balances match.
Yes. This guide can help you understand the format, examples, and checking steps, but you should still follow your class instructions.
