Both transactions and journal entries serve the same purpose of documenting credit and debit entries in the posting journal.
- Journal entries
Journal entries are the standard method for recording financial transactions in the posting journal. Every transaction ultimately creates a journal entry, but manual journal entries offer more flexibility for complex accounting needs that fall outside of standard transaction categories.
- Transactions
Transactions function as predefined journal entry categories that simplify the accounting process. They allow you to record financial activity without manually determining which accounts to debit or credit.
Use transactions to record common financial events quickly, ensuring the correct accounts are impacted every time.