Accounting
A journal entry is the way each transaction is recorded in a business’s books. According to the principle of double-entry bookkeeping, each entry is made in two parts of equal value: where the money comes from and where it goes. Dated and documented, it leaves a verifiable record.
Think of double-entry bookkeeping as a scale: every transaction has two sides that must always balance, making it easy to spot errors. Here’s an example: You buy a computer for $1,500, paid for by the bank; the “Computer Equipment” account is debited $1,500 and the “Bank” account is credited $1,500, and the two sides balance. You don’t have to become an accountant, but understanding this logic gives you more autonomy: you’ll read your reports with a critical eye and ask better questions. This also explains year-end adjustments that seem to come out of nowhere, such as depreciation (spreading the cost of equipment over several years) or wages earned by your employees but not yet paid. Each journal entry contributes to your general ledger, while respecting your chart of accounts. The CRA also requires you to keep supporting documentation for each entry in your accounting records. To ensure these entries are done correctly, Bankeo provides you with a free, vetted accountant or CPA who handles all the technical details, and we’re here to support you every step of the way.
These are simply the two columns of any accounting entry: the left and the right. For each transaction, you enter an amount in each column, and the two must always add up to the same total, this is called double-entry bookkeeping. Depending on the type of account involved, a debit or credit increases or decreases the balance; the software or your accountant applies the correct rule, so you don’t have to memorize it.
It is an adjustment made at the end of the period to ensure that the books accurately reflect the actual financial situation. Examples: depreciation (spreading the cost of an asset over its useful life), wages earned by your employees but not yet paid, or a customer who has paid in advance for a service you haven’t yet provided. These journal entries often explain the discrepancy between your internal figures and the final financial statements prepared by your accountant.
Not really: software generates most of the journal entries based on your invoices and bank statements. Understanding the logic is enough to read your reports and ask the right questions. For everything else, Bankeo connects you, for free, with a vetted accountant or CPA who handles all the technical details, and we’re here to support you every step of the way.
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