{"id":"concept:journal-entry","kind":"concept","label":"Journal Entry","synonyms":["journal posting","ledger entry"],"definition":"A journal entry is a dated record with a memo and two or more lines, each naming an account and an amount, where the amounts always net to exactly zero.","summary":"The basic unit of bookkeeping: a date, a short memo, and lines that name an account and an amount each. A $120.50 hardware-store charge is one entry with two lines — Materials debited, Checking credited. Once posted, an entry is permanent; it can only be undone by a reversing entry, never edited.","explanation":["A journal entry is the basic unit of bookkeeping — a dated record with a short memo describing what happened, and two or more lines underneath, each naming an account and an amount. The one hard rule: the amounts across all the lines must net to zero. That is the mechanism that makes double-entry bookkeeping work at all.","Take $120.50 spent at a hardware store, paid from checking: a date, a memo like \"Hardware Depot #4021 — materials,\" and two lines — Materials debited $120.50, Checking credited $120.50. A single charge can also split across more than two lines, as long as everything still nets to zero — a $310 charge that is really $280 of Materials and $30 of Supplies posts as one entry with three lines, two debits summing to match one credit.","Entries come from more than one place. Most arrive automatically the moment a bank transaction is categorized — the bank side is already known, and categorizing just names the other side. Others are posted directly, with no bank transaction behind them at all, for something like depreciation or an owner's contribution. Every entry records which of these paths produced it: manual, import, or ai.","In BalanceMCP, amounts are whole cents, not dollars-and-cents decimals — a $12.50 credit is entered as -1250, not -12.50 — and a fractional cent is rejected outright rather than rounded. An entry needs at least two lines, and if the amounts don't sum to zero, it isn't partially accepted or silently adjusted; it's refused, with a message naming exactly how far off it was and in which direction. Once posted, an entry is permanent — there is no edit button and no delete. Correcting a mistake means posting a new entry that reverses it, never touching the original."],"commonMistakes":["Entering an amount as a dollar decimal (12.50) instead of whole cents (1250) — a fractional cent is rejected, not rounded.","Expecting to edit a posted entry directly. Nothing in BalanceMCP allows that; the fix is always a reversing entry followed, if needed, by a correct one.","Assuming a bank transaction and a journal entry are the same thing — a transaction is a raw fact; categorizing it is what turns it into an actual entry."],"category":"fundamentals","questions":[{"question":"Can one journal entry have more than two lines?","answer":"Yes — a single charge can split across several accounts as long as the whole entry still nets to zero, such as one payment split between an expense and a sales-tax liability."},{"question":"What happens if the lines don't balance?","answer":"The entry is rejected outright, not partially accepted, and the error states exactly how far off it was and in which direction."}],"url":"/glossary/journal-entry","relatedTo":[{"id":"concept:double-entry-bookkeeping","relationship":"related","weight":0.9,"api":"/api/knowledge/concept%3Adouble-entry-bookkeeping"},{"id":"concept:debit","relationship":"related","weight":0.9,"api":"/api/knowledge/concept%3Adebit"},{"id":"concept:credit","relationship":"related","weight":0.9,"api":"/api/knowledge/concept%3Acredit"},{"id":"concept:posting","relationship":"related","weight":0.9,"api":"/api/knowledge/concept%3Aposting"},{"id":"concept:general-ledger","relationship":"related","weight":0.9,"api":"/api/knowledge/concept%3Ageneral-ledger"},{"id":"concept:reversing-entry","relationship":"related","weight":0.9,"api":"/api/knowledge/concept%3Areversing-entry"},{"id":"concept:adjusting-entry","relationship":"related","weight":0.9,"api":"/api/knowledge/concept%3Aadjusting-entry"},{"id":"guide:what-is-a-journal-entry","relationship":"references","weight":0.7,"api":"/api/knowledge/guide%3Awhat-is-a-journal-entry"},{"id":"tool:post_journal_entry","relationship":"references","weight":0.7,"api":"/api/knowledge/tool%3Apost_journal_entry"},{"id":"tool:reverse_entry","relationship":"references","weight":0.7,"api":"/api/knowledge/tool%3Areverse_entry"}],"referencedBy":[{"id":"concept:interest-expense","label":"Interest expense","url":"/glossary/interest-expense"},{"id":"concept:double-entry-bookkeeping","label":"Double-Entry Bookkeeping","url":"/glossary/double-entry-bookkeeping"},{"id":"concept:debit","label":"Debit","url":"/glossary/debit"},{"id":"concept:credit","label":"Credit","url":"/glossary/credit"},{"id":"concept:general-ledger","label":"General Ledger","url":"/glossary/general-ledger"},{"id":"concept:posting","label":"Posting","url":"/glossary/posting"},{"id":"concept:audit-trail","label":"Audit Trail","url":"/glossary/audit-trail"},{"id":"concept:transaction","label":"Transaction","url":"/glossary/transaction"},{"id":"concept:categorization","label":"Categorization","url":"/glossary/categorization"},{"id":"concept:split-transaction","label":"Split Transaction","url":"/glossary/split-transaction"},{"id":"concept:transfer","label":"Transfer","url":"/glossary/transfer"},{"id":"concept:reversing-entry","label":"Reversing Entry","url":"/glossary/reversing-entry"},{"id":"concept:adjusting-entry","label":"Adjusting Entry","url":"/glossary/adjusting-entry"},{"id":"concept:memo","label":"Memo","url":"/glossary/memo"},{"id":"concept:period-lock","label":"Period Lock","url":"/glossary/period-lock"},{"id":"concept:mcp-tool","label":"MCP Tool","url":"/glossary/mcp-tool"},{"id":"concept:dry-run","label":"Dry Run","url":"/glossary/dry-run"},{"id":"concept:audit-log","label":"Audit Log","url":"/glossary/audit-log"},{"id":"guide:what-is-a-journal-entry","label":"What a Journal Entry Is, and What Makes One Valid","url":"/guides/what-is-a-journal-entry"},{"id":"tool:post_journal_entry","label":"Post a manual adjustment that didn't come from your bank","url":"/tools/post_journal_entry"}],"license":"https://creativecommons.org/licenses/by/4.0/","attribution":"BalanceMCP — https://balancemcp.com"}