When you write a cheque to pay your vendor, Insurance Experts, you are taking the money out of your bank account. At the same time, it also increases your business expense, Insurance Expense. In other words, the transaction journal looks like:
• Debit Insurance Expense (increases)
• Credit Bank Account (decreases)
Now, press Ctrl+Y on your keyboard to open Transaction journal window:
As you can see, it shows the debit of Insurance Expense and the credit of Chequing account of the same amount. This makes you see what really happens from accounting point of view and makes you understand more of the transaction.
In older QuickBooks Pro, however, the debit and credit may not show up in the Transaction Journal window. To make them appear in the Transaction Journal report, click the Customize Report and check mark the Debit and Credit columns in the Modify Report dialog box as shown below:
