What is Journal Entries?
A journal entry is the chronological recording of a business transaction in the general journal using the double-entry system, with at least one debit and one credit of equal value, and a brief narrative explaining the transaction.
How It Works
- Every entry has at least one debit and one credit, equal in total.
- Date, accounts affected, debit amount, credit amount, narrative.
- Posted from the journal to the relevant general ledger accounts.
- Aggregated into the trial balance, then financial statements.
Saudi Context
Saudi accounting systems must produce a complete, sequentially numbered journal accessible to ZATCA inspectors on request. Manual journal entries (versus automated postings from sales or AP modules) need supporting documentation and approval trails as part of the internal control framework expected by Saudi auditors.
Example
A Saudi retailer pays SAR 5,000 in cash for office supplies. Journal entry: Dr Office Supplies 5,000, Cr Cash 5,000. Narrative: ‘Purchase of office supplies, invoice #2026-117’.