Purpose of Adjusting Entries in a General Ledger. Journal entries are the basic, essential building blocks that are used to create a company's balance sheet and income statement.

For example, if your company purchases a piece of machinery with a sticker price of $10,000, which requires payment of a 5-percent sales tax, or $500, plus a delivery charge of $500 -- all three ...

A closing entry is a journal entry made at the end of the accounting period, moving data from temporary to permanent accounts and resetting temporary balances to zero.