An accounting entry is a notation in a company’s accounting book that represents its economic movements.
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What an accounting entry is used for
An accounting entry serves to reflect in the company’s accounting an economic transaction that increases or decreases the company’s assets, or a transaction that has accounting relevance.
Correctly performing the entry of accounting entries is very important to control income and expenses at all times and for accounting to faithfully reflect the economic situation of that company.
Among the information we can find in an accounting entry, there is the date, the entry number, the amount, and the accounts in which that movement occurs, as well as a description.
The system for making them is based on the concept “Double entry”. Each accounting entry we record has at least two parts; the origin and the destination.
Types of entries
In a company’s accounting we find these types of entries:
Opening entry: It is the one that opens the accounting, either when starting the accounting of a company in its beginnings, or when you start the accounting of a period, for example at the beginning of the year.
Operating or exercise entries: These are the entries we make day by day to reflect the transactions that the company carries out.
Adjustment entries: At the end of an accounting cycle we must make some adjustment entries to close the accounting.
Regularization entries: They are used to close all expense and income accounts and thus transfer them to the “Profit and loss” account.
Closing entry: It is the entry that ends the accounting period. With it we will close all the accounts of the “Balance Sheet”.
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