Let's talk about the basics of journal transactions, and how to enter them in Wave.
What's the deal with journal transactions?
Most transactions in a business occur when money changes hands, or will change hands. A journal transaction, also called a journal entry, is different; it's used to enter business activity that doesn't involve money changing hands. Examples of common journal entries include:
- Recording a non-cash expense, like depreciation
- Making period-end adjustments
- Adjusting an account balance
- Entering starting account balances
How do I make a journal transaction?
You can make journal transactions on the Transactions page:
You can also upload journal transactions using Wave Connect!
What else do I need to know?
Every journal transaction needs to "balance," or in other words, the debits and credits have to total to the same amount. If you create a journal transaction that doesn't balance, you'll get a warning message, and you won't be able to save it.
Why are accountants obsessed with everything "balancing?" Because in modern accounting, aka "double-entry accounting," every debit must have a matching credit, and vice versa. Both sides are created automatically in Wave for all other types of transaction!
What if I have more questions?
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