Why it matters
The journal entry is the building block of the books. Every report, reconciliation and tax return depends on entries that are complete and balanced, and an entry without support is the first thing a reviewer questions.
Example
A client pays a $1,200 insurance premium for the year. The bookkeeper records a debit to prepaid insurance and a credit to cash, then records a monthly entry to move $100 to insurance expense as each month passes.
Related terms
Questions about Journal entry
What is the difference between a journal entry and a transaction?
A transaction is the event, such as a payment or a sale. A journal entry is the bookkeeping record that puts the transaction into the general ledger.
Does every journal entry need support?
Yes. An entry should have a source document, a calculation or a note that explains it. An unsupported entry is hard to review and hard to defend in an audit.