How to Create Journal Entries in QuickBooks Online
- holmesjay219
- May 30
- 4 min read
What Is a Journal Entry in QuickBooks Online?
A journal entry is a manual recording of a business transaction directly into the general ledger using double-entry bookkeeping. Each journal entry involves a debit to one account and a corresponding credit to another, ensuring the books remain balanced.
In QuickBooks Online, journal entries are commonly used to:
Record non-cash transactions
Make year-end adjustments
Allocate payroll costs
Adjust asset depreciation
Correct previous errors
Unlike invoices or bills, journal entries are not tied to a vendor or customer but serve as direct general ledger updates.
When Should You Use Journal Entries in QuickBooks?
You should use journal entries in QuickBooks Online only when a transaction cannot be entered using the standard forms (like invoices, bills, or expenses). Some examples include:
Depreciation or amortization entries
Accruals and deferrals at month-end or year-end
Reclassification of incorrect postings
Equity distributions or contributions
Adjusting payroll liabilities manually
Recording intercompany transfers
Tax adjustments by CPAs or accountants
Note: Avoid journal entries for sales, purchases, or payroll if these can be entered using built-in workflows. Incorrect use of journal entries can cause reconciliation issues.
See More: QuickBooks Desktop 2024 New features
Preliminary Considerations Before Posting a Journal Entry
Before you create a journal entry in QBO, take the following into account:
Identify the accounts involved (e.g., Assets, Liabilities, Equity, Income, Expenses)
Determine the amounts to debit and credit
Review your fiscal year-end if you're adjusting year-end balances
Be aware of class or location tracking if your QBO subscription includes it
Consult your accountant or CPA if unsure about double-entry rules
Step-by-Step: How to Create a Journal Entry in QuickBooks Online
Follow these steps to create a journal entry in QuickBooks:
Step 1: Sign In to QuickBooks Online
Go to https://qbo.intuit.com and log in using your credentials.
Step 2: Navigate to the Journal Entry Window
Click the + New button on the left navigation bar
Under Other, select Journal Entry
Step 3: Fill Out the Journal Entry Form
The journal entry screen will include the following fields:
Field | Description |
Journal Date | Choose the date of the transaction |
Journal No. | Optional – QuickBooks assigns one automatically |
Account | Select the first account to debit or credit |
Debits / Credits | Enter the amounts to ensure debits = credits |
Description | Optional – use it to explain the purpose |
Name | Optional – assign to a vendor/customer if needed |
Step 4: Add Additional Lines
Click Add Line to input the corresponding debit/credit entry
Make sure the journal balances — total debits must equal total credits
Step 5: Save the Journal Entry
Click Save and Close or Save and New if you’re entering another.
Know More: Download QuickBooks Desktop 2024
Common Use Cases for Journal Entries
Here are some scenarios where journal entries are essential in U.S. accounting practices:
1. Year-End Adjustments
Deferred revenue
Accrued expenses
Adjusting retained earnings
2. Payroll Allocation
You may want to reclassify gross payroll expenses to multiple departments or classes.
3. Depreciation Entries
Manually recording monthly or annual depreciation of fixed assets.
4. Loan Principal and Interest Separation
Allocating monthly loan payments between principal and interest components.
5. Sales Tax Adjustments
Correcting under- or over-reported sales tax liabilities.
Tips for Accurate Journal Entries in QBO
Always double-check the debit and credit amounts
Use consistent descriptions for easy identification later
Restrict access to journal entries for non-accounting users
Include supporting documents (upload via attachments if needed)
Use class and location tracking if applicable for reporting
Pro Tip: Always run a Trial Balance after posting key journal entries to ensure your books remain in balance.
How to Edit or Delete a Journal Entry?
To Edit:
Click the Search icon in the top right corner
Type Journal Entry and select it from the list
Click the entry you want to edit
Make your changes and click Save and Close
To Delete:
Open the journal entry as above
Click More at the bottom of the form
Select Delete
Confirm the deletion
Caution: Deleted journal entries cannot be recovered. Always double-check before deleting.
Reporting and Reviewing Journal Entries
To review journal entries:
Go to Reports
Search for Journal
Customize date range and filters
Export to Excel or PDF if needed
You can also run:
Transaction Detail by Account
Trial Balance
General Ledger
These reports help ensure that your journal entries align with your financial statements
.
Suggested Reading: Upgrade QuickBooks Desktop 2024 New Features
Final Thoughts
Understanding how to create and manage journal entries in QuickBooks Online is crucial for ensuring financial accuracy, especially during tax season or audit prep. For U.S. accounting professionals, QBO offers a simple yet robust interface to handle adjustments that go beyond day-to-day transactions.
When in doubt, consult your CPA or financial advisor. Accurate journal entries not only keep your books balanced — they form the foundation of sound financial reporting.
Frequently Asked Questions
Can I create a journal entry in QuickBooks Online Simple Start?
No. Journal entries are only available in QuickBooks Online Essentials, Plus, and Advanced plans — not simple Start.
What’s the difference between a journal entry and a transaction?
A transaction (like an invoice or bill) is recorded through a form. A journal entry is a manual entry directly into the general ledger, typically used for adjustments or corrections.
Can I reverse a journal entry in QuickBooks Online?
QuickBooks Online does not have a built-in "reverse journal entry" feature. You need to create a new journal entry that flips the debit and credit values.
How do I attach documents to a journal entry?
While creating the journal entry, scroll to the bottom of the form. You’ll see an Attachments section. Drag and drop your file or upload it from your device.
Are journal entries automatically included in financial reports?
Yes. Journal entries immediately impact your general ledger and are reflected in reports like the Balance Sheet, Profit and Loss, and Trial Balance.
Need Help With QuickBooks Journal Entries?
If you're unsure about how to post complex journal entries, or if you’re cleaning up your books for tax season, our team of U.S.-based QuickBooks experts is here to help.
Contact Us +1-347-967-4079 today for a free consultation.
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