How to use journal entries in QuickBooks Online

In QuickBooks Online, journal entries are used to record accounting adjustments that do not fit neatly into invoices, bills, deposits, checks, or expenses. They affect your general ledger directly, so they should be used carefully.

When to use journal entries

Use journal entries for things like:

Adjusting entries at month-end or year-end

Depreciation

Accrued expenses

Prepaid expenses

Owner contributions or draws

Loan balances and interest adjustments

Reclassifications between accounts

Accountant-provided adjustments

Avoid using journal entries for normal activity like customer invoices, vendor bills, sales tax, payroll, inventory, or bank deposits unless your accountant specifically recommends it.

How to create a journal entry in QuickBooks Online

1. Select + New.

2. Under Other, select Journal entry.

3. Enter the Journal date.

4. Enter a Journal no. if QuickBooks does not automatically assign one.

5. On the first line, choose the account affected.

6. Enter the amount in either the Debits or Credits column.

7. Add a description in the Description field.

8. Add a name in the Name field if the entry relates to a customer, vendor, employee, or owner.

9. On the next line, choose the offsetting account.

10. Enter the opposite amount so total debits equal total credits.

11. Add any additional lines needed.

12. Select Save and close.

Example: recording depreciation

Suppose you need to record $500 of monthly depreciation.

Account Debit Credit

Depreciation Expense $500

Accumulated Depreciation $500

This increases depreciation expense and increases the contra-asset account for accumulated depreciation.

Example: owner contribution

If the owner deposits $2,000 of personal money into the business bank account:

Account Debit Credit

Business Checking $2,000

Owner’s Contribution / Equity $2,000

This increases the bank balance and records the contribution as equity.

Important rules

Debits and credits must always balance. The total debit amount must equal the total credit amount.

Use the correct date because journal entries affect reports based on the transaction date.

Add clear descriptions so you or your accountant can understand the adjustment later.

Use names only when needed. Adding a customer, vendor, or employee can affect detail reports.

Be careful with Accounts Receivable and Accounts Payable. If you use A/R or A/P in a journal entry, QuickBooks usually requires a customer or vendor name. In many cases, it is better to use invoices, payments, bills, or bill payments instead.

How to view journal entries

Go to:

Reports → Journal

or open an account register from the Chart of accounts and look for transactions marked as journal entries.

You can also search by selecting the Search icon and entering the journal entry number, amount, or date.

How to edit or delete a journal entry

1. Open the journal entry from a report, register, or search.

2. Make the needed changes.

3. Select Save.

To delete it, open the journal entry, select More, then choose Delete.

Only edit or delete journal entries if you are sure they are incorrect. For closed periods, it is usually better to create a reversing or correcting journal entry instead.

Best practice

For most businesses, journal entries should be limited to accountant adjustments. Use QuickBooks forms for regular activity:

Activity Better QuickBooks form

Customer sale Invoice or Sales receipt

Customer payment Receive payment

Vendor purchase Bill or Expense

Vendor payment Pay bills

Bank activity Bank feeds or Bank deposit

Payroll Payroll module

Inventory Inventory transactions

Journal entries are powerful because they directly change your books. Use them when needed, but rely on standard QuickBooks transactions whenever possible.