General journal: Difference between revisions

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A general journal is a daybook or subsidiary journal book in which transactions relating to adjustment entries, opening stock, accounting errors etc. are recorded. The source documents of this prime entry book may be journal vouchers, copies of management reports and invoices.

It is where double entry bookkeeping entries are recorded by debiting one or more accounts and crediting another one or more accounts with the same total amount. The total amount debited and the total amount credited should always be equal, thereby ensuring the accounting equation is maintained.^[1] In accounting and bookkeeping, a journal is a record of financial transactions in order by date.

A journal is also named the book of original entry, from when transactions were written in a journal prior to manually posting them to the accounts in the general ledger or subsidiary ledger. Manual systems usually had a variety of journals such as a sales journal, purchases journal, cash receipts journal, cash disbursements journal, and a general journal.

Depending on an organisation's accounting information system, specialized journals may be used in conjunction with the general journal for record-keeping. In such case, use of the general journal may be limited to non-routine and adjusting entries.

Process

A bookkeeper or accountant would usually maintain the general journal. A general journal entry would typically include the date of the transaction, which may be dispensed with after the first entry of the day, the names of the accounts to be debited and credited, the amount of each debit and credit, and a summary explanation of the transaction, also known as a narration.

There may be multiple debit or credit entries, but the sum of the debits must be equal to the sum of the credits.

See also

• Sales journal
• Special journal
• Ledger
• Final Accounts

References