What is a journal entry?

A journal entry is a record of a financial transaction that shows which accounts are affected and the amounts debited and credited. Journal entries are the foundation of double-entry bookkeeping and ultimately flow into the general ledger.

Example: When a business pays rent, the rent expense account is debited, and the cash account is credited through a journal entry.

Related terms: General Ledger, Debit, Credit, Double-Entry Bookkeeping