The recordings of financial transactions in chronological order using double-entry bookkeeping, involving debits and credits to maintain the accounting equation.
Journal entries are the chronological recording of financial transactions in a company's accounting system. They serve as the foundation for preparing financial statements and help small business owners track and analyze their business activities. Journal entries include debits and credits, with each entry documenting the affected accounts, amounts, and a brief description of the transaction. These entries are crucial for maintaining accurate and up-to-date financial records, ensuring compliance with accounting principles and regulations, and facilitating financial analysis and decision-making.