Journal Entries

Tip

Prefer watching over reading? See the video tutorials: Simple Mode — Pay an Expense, Expert Mode — Compound Entry, and AI Receipt Scanner ✨.

Journal entries are the fundamental building blocks of accounting. Every financial transaction is recorded as a journal entry with debits and credits.

What is a Journal Entry?

A journal entry records a business transaction with:

• Date - When the transaction occurred
• Description - What the transaction is for
• Line items - Account, debit/credit amount for each affected account

Note

The golden rule: Debits must equal Credits in every entry.

Creating a Journal Entry

1. Navigate to Journal Entries

   Click Journal Entries in the sidebar and click “New Entry”.

2. Enter Header Information

   • Date - Transaction date
   • Description - Brief explanation (e.g., “Monthly rent payment”)
   • Reference (optional) - External reference number

3. Add Line Items

   For each line:

   • Select the Account
   • Enter either a Debit or Credit amount
   • Add a Memo (optional)

4. Verify Balance

   The form shows:

   • Total Debits
   • Total Credits
   • Difference (must be zero)

5. Save Entry

   Click “Post Entry” when balanced.

Simple Mode vs Expert Mode

LedgerBuk offers two modes for recording transactions, depending on your accounting knowledge:

Simple Mode (Recommended for most users)

Simple Mode helps you record transactions without needing accounting knowledge. Choose what you want to do, fill in a few fields, and LedgerBuk posts the correct double entry automatically.

Basic Fields

• Date - When the transaction happened
• Description - Short note explaining the transaction (e.g., “Office rent – January”)

Transaction Types

a) Pay an Expense

Use this when paying for business costs (rent, salaries, utilities, etc.). Fill in:

• Amount Paid - How much you paid
• Pay From - Where the money came from (Cash, Bank, M-Pesa). Current balance is displayed
• Expense Type - What the payment was for (Rent, Tax, Salaries, etc.)

b) Receive Payment/Income

Use this when receiving money from customers or earning income. Fill in:

• Amount Received - Money received or earned
• Income Source - Type of income (Sales, Legal Fees, Service Revenue, etc.)
• Deposit To - Where the money goes (Cash, Bank, M-Pesa, or Accounts Receivable if to be paid later)

c) Transfer Funds

Use this to move money between your accounts (e.g., Bank → Cash, M-Pesa → Bank) or correcting money posted to the wrong account. Fill in:

• Transfer amount - Amount to move
• Transfer from - Source account
• Transfer To - Destination account

d) Pay a Liability

Use this to settle debts or obligations (e.g., loan repayment, tax payment, paying a supplier who had supplied on credit). Fill in:

• Payment amount - Amount paid
• Pay from - Account used to pay
• Liability account - Type of debt/obligation being settled

e) Record a Liability

Use this when you owe money but haven’t paid yet (e.g., taking a loan, buying goods on credit, paying an expense later). Fill in:

• Amount owed - Amount of the debt
• Liability Type - The liability being recorded (e.g., Loan, Tax payable, Accounts payable, etc.)
• For - What the debt relates to (expense or asset)

f) Custom Entry

Use this if you understand debits and credits and want full control. Fill in:

• Amount - The amount being posted
• From account - The source account; this is the account that will be credited by this entry
• To account - The destination account; the account to be debited

Expert Mode (For accounting users)

Expert Mode gives full manual control over journal entries.

Fields

• Date - Transaction date
• Description - Short explanation
• Account - Choose the account
• Debit - Enter debit amount
• Credit - Enter credit amount
• + Add line - Add more accounts for complex or batch entries

Use this mode if you want to:

• Post complex entries
• Split transactions across many accounts
• Record bulk or batch postings

Example: Recording a Sale

When you sell goods for $1,000 on credit:

Account	Debit	Credit
1100 Accounts Receivable	$1,000
4000 Sales Revenue		$1,000

Explanation:

• Debit Receivable (asset increases)
• Credit Revenue (income increases)

Example: Recording an Expense

When you pay $500 rent:

Account	Debit	Credit
6100 Rent Expense	$500
1000 Cash		$500

Explanation:

• Debit Expense (expenses increase)
• Credit Cash (asset decreases)

Common Entry Types

Transaction	Debit	Credit
Cash sale	Cash	Revenue
Credit sale	Accounts Receivable	Revenue
Pay expense	Expense account	Cash
Receive money	Cash	Accounts Receivable
Pay supplier	Accounts Payable	Cash
Record purchase	Expense/Asset	Accounts Payable

Debit and Credit Rules

Account Type	Increase	Decrease
Assets	Debit	Credit
Liabilities	Credit	Debit
Equity	Credit	Debit
Revenue	Credit	Debit
Expenses	Debit	Credit

Tip

Memory aid: Assets and Expenses increase with Debits (they’re on the left side of the equation).

Viewing Entry History

The Journal Entries list shows:

• Date and description
• Entry number
• Total amount
• Status (Posted, Reversed)

Click any entry to view full details and line items.

Filtering and Searching

Use the Period controls at the top of the Journal Entries page to focus on a specific date range. The options match the Profit & Loss selector:

• Annual (current fiscal year)
• Semi-Annual (H1 / H2)
• Quarterly (Q1 - Q4)
• Monthly (any month in the fiscal year)
• Custom Range (pick exact start and end dates)

By default, LedgerBuk shows fiscal year to date (FYTD).

Use the search field to find entries by:

• Entry number
• Description
• Reversal entry number or description

Pagination (Load More)

Journal Entries load in pages for performance. The list shows the first 12 entries in the selected period. Click Load more to fetch the next page.

Empty States

• No entries yet: The organization has not recorded any journal entries.
• No entries in this period: There are entries in other periods, but none in the selected date range.

Next Steps

• Posting Transactions - Understand the posting process
• Reversing Entries - How to correct mistakes