Introduction

What Is a Journal Entry?

A journal entry is a record of a financial transaction in your accounting system.
It shows which accounts increase or decrease using debits and credits.

Why Do We Use Journal Entries?

Journal entries are used to record financial activities that are not captured through regular modules like invoices, bills, or payments. Common purposes include:

Adjustments (e.g., accruals, prepayments, year-end adjustments)
Corrections for errors in previous recordings
Reclassification of amounts between accounts
Ensuring financial statements remain accurate and up-to-date
Providing a clear audit trail for important accounting movements

Steps to create a Journal Entry

1. Head to Accounting > Journal Entries > +New.

2. Information Needed to Fill In

No.	Field / Action	Required / Optional	Description
1	Date	✅ Required	Select the correct posting date for the journal entry.
2	Currency & Rate	✅ Required	Choose the transaction currency and exchange rate if applicable.
3	No.	✅ Required	Selected system-generated numbering format.
4	Reference Number	🟦 Optional	Add your own reference for tracking (invoice no., memo no., etc.).
5	Tags	🟦 Optional	Tag the transaction with department / branch / sales person / project & etc.
6	+Item	✅ Required	Add debit & credit line items (must balance).
7	Debit & Credit Accounts	✅ Required	Choose the appropriate accounts for each line.
8	Item Line Descriptions	🟦 Optional	Add short explanations for each entry line.
9	Amounts	✅ Required	Enter debit and credit amounts.
10	Remarks	🟦 Optional	Extra details for your own reference.
11	Transaction Description	🟦 Optional	A short note about this transaction, shown in reports.
12	Internal Note	🟦 Optional	Visible internally; not shown in reports.
13	Attachments	🟦 Optional	Upload supporting documents if any.
14	Status of Transaction	✅ Required	Choose Draft / Pending Approval / Ready.
15	Save	✅ Required	Save the journal entry to record it.

📝 Tips: Information You Need Before Creating a Journal Entry

📅 Transaction Date – The date the journal entry should be posted.
💼 Accounts Involved – Identify the debit and credit accounts.
💰 Amounts – Exact debit and credit amounts (must balance).
🧾 Supporting Documents – Receipts, invoices, or other proof.
📝 Reason for the Entry – Specify the purpose: adjustment, correction, accrual, etc.

Example Scenarios: Recording Year-End Adjustments

As your company prepares for the financial closing for December 2025, the accountant identifies several transactions that require year-end adjustments, error corrections, and accrual entries. Below are the situations and how to record them correctly.

Adjustment & Error Correction

Scenario:

A payment of RM200 for Telephone Expense was mistakenly recorded under Office Supplies. This error needs to be corrected to ensure accurate financial reporting.

Correcting Journal Entry:

To reclassify the expense to the correct account:

Debit: Telephone Expense – RM200
Credit: Office Supplies – RM200

This entry transfers the incorrectly posted amount to the correct expense category.

Accrual of Expenses

Scenario:

The company has incurred RM4,000 in staff salaries for the last week of December 2025. Payment will only be made on 3 January 2026. Since the expense belongs to December, it must be recognized in the year-end accounts.

Accrual Journal Entry:

Debit: Salaries & Wages – RM4,000
Credit: Salary Control – RM4,000

This entry records the salaries owed at year-end, even though the payment will be made in the following month.

💡 Tip: To see the full process of recording salaries in Bukku, check out Recording Employee Salaries & Statutory Payments.

Frequently Asked Questions (FAQ)

Can I edit a journal entry after saving?
- Yes, you can edit a journal entry after saving it — as long as the accounting period is not locked.
- If the accounting period is locked:
  - You cannot edit the journal entry.
  - To make changes, you must unlock the accounting period first.
⚠️ Tip: Always double-check entries before locking the period to avoid unnecessary adjustments.
Does Bukku auto-balance debit & credit?
- Yes! Each time you add a new item, Bukku will automatically fill in the remaining credit to ensure that debits and credits balance.
- You can also monitor the current balance in the summary table for each journal entry.
Can I attach supporting files?
- Yes! You can upload invoices, receipts, or any other supporting documents under the Attachments section of the journal entry.
- Attaching documents helps maintain a clear audit trail and makes it easier to verify transactions later.
Why did I receive the message “Total debit amount must be equal to total credit amount.” when saving my journal entry?
- This message appears when the total debit and total credit amounts do not match.
- To successfully save the journal entry, ensure that debits and credits are equal, as required by double-entry accounting.
How Can I Make Adjustments for Accounts Receivable and Accounts Payable?
- Adjustments for Accounts Receivable (AR) and Accounts Payable (AP) should be made directly in the Sales and Purchases modules, rather than through a Journal Entry. This ensures balances are updated accurately.
- Accounts Receivable (AR):
  - To increase / debit AR: Record a Sales → Invoice
  - To reduce / credit AR: Record a Sales → Credit Note
- Accounts Payable (AP):
  - To increase / credit AP: Record a Purchases → Bill
  - To reduce / debit AP: Record a Purchases → Credit Note
- 💡 Tip: Always use the proper module for AR and AP adjustments to maintain accurate customer and supplier balances.