A journal entry records a transaction as debits and credits to accounts. Total debits always equal total credits. Most entries are created by source documents (a bill, an invoice, a payroll run); manual journal entries handle accruals, reclassifications, corrections and anything without its own document.
Each entry has a posting date (which decides its period), often a document date, a memo, and the lines with their dimensions. Once posted, it shouldn’t change: a correction is a new, reversing entry.
Why it matters
Manual journal entries are where errors and fraud most often hide, because they can touch any account. Auditors read the manual JE listing closely. Good practice is a clear memo, attached support and a second person’s approval above a threshold.
Worked example
Month-end accrual for subcontract work in place whose pay apps arrive after close (sample data): Dr 5200 JC – Subcontract $110,050 (job 24-118, split across HVAC and electrical cost codes) / Cr 2040 Received Not Invoiced $110,050, set to auto-reverse on the first of next month.
Common mistakes
- A memo like “adjustment” that nobody can explain a year later.
- Posting to AP or AR control accounts by hand.
- Fixing a posted entry by editing it.
How os.construction handles it
In the accounting preview, journal entries route for approval above your threshold and can never be approved by anyone who prepared or edited them. See General ledger and journal entries.