Journal Entry
Definition
A record of a transaction in the accounting system, showing which accounts are debited and credited and by how much. Manual journal entries are used for adjustments that do not come from a bank feed or invoice.
Want a deeper explanation?
Most transactions create journal entries automatically. The manual ones, like accruals, inventory adjustments, depreciation and settlement summaries, are where much of the real accounting judgment lives.
Every manual entry should have a clear memo and support attached. Watch for: large manual entries with no explanation, which are impossible to audit later and a common place for errors to hide.
Example
At month-end, a journal entry moves $42,000 from inventory to COGS for the units sold, based on the inventory report.