What is a journal entry?

A journal entry serves as a detailed record of specific financial transactions within an organization, capturing essential information such as the accounts affected, the amounts debited and credited, and the date of the transaction. This entry is the foundational element of the double-entry accounting system, where each transaction impacts at least two accounts to maintain the accounting equation (assets = liabilities + equity).

By documenting these particulars, a journal entry enables businesses to track their financial activities accurately and provides the necessary details for preparing financial statements. The meticulous nature of this record ensures that all transactions are captured in a systematic manner, facilitating accurate analysis and reporting later on.

The other options do not accurately capture the essence of what a journal entry is. A summary of a company's financial position refers to financial statements rather than individual transactions, while an overview of cash flows relates more to the cash flow statement. An evaluation of company performance involves analyzing financial metrics and ratios rather than documenting specific transactions. Thus, a journal entry is best defined as a record of transactions with account details, reflecting the critical nature of its role in accounting.