How to Create Journal Entries in QuickBooks Online?

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

1. Click the + New button on the left navigation bar
2. 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:

1. Click the Search icon in the top right corner
2. Type Journal Entry and select it from the list
3. Click the entry you want to edit
4. Make your changes and click Save and Close

To Delete:

1. Open the journal entry as above
2. Click More at the bottom of the form
3. Select Delete
4. 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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