The General Journal

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The General Journal

An example of journal entries. Image credit Frank Wood's Business Accounting 1

An example of journal entries. Image credit Frank Wood’s Business Accounting 1

ZIMSEC O Level Principles of Accounts Notes: The General Journal

As already said there are several books of Prime Entry namely:

  •  The Sales Day Book
  • The Purchases Day Book
  • The Returns Inwards Day Book
  • The Returns Outwards Day Book.
  • The Cash Book

 

  • Each of these books is devoted to a particular type of transaction. For example all Purchases returns are recorded in the Returns Outwards Day Book.
  • There are, however, other types of transactions which do not pass through these books.
  • These transactions are much rarer in businesses when compared to those transactions which are recorded in the above books.
  • These transactions are recorded in the Journal.
  • The Journal is also known as the General Journal or Journal Proper.
  • This book acts as a diary for all these other transactions before they are transferred to the General Ledger.
  • For each transaction the following are recorded:
  1. The date
  2. The name of account(s) to be debited and the amount(s)
  3. The name of the account(s) to be credited and the amount(s)
  4. A description and explanation of the transaction (this is called a narrative)
  5. A folio reference to the source documents giving proof of the transaction.
  • Using a journal prevents fraud and errors.

Uses of the Journal

  • Some of the main uses of the Journal are listed below:

1 The purchase and sale of fixed assets on credit.
2 Writing off bad debts.
3 The correction of errors in the ledger accounts.
4 Opening entries. These are the entries needed to open a new set of books.
5 Adjustments to any of the entries in the ledgers.

NB This is not an exhaustive list.

The layout of a journal

The layout of a journal. Image credit Frank Wood's Business Accounting 1.

The layout of a journal. Image credit Frank Wood’s Business Accounting 1.

  • The first line records the account to be debited.
  • The second line records the account to be debited.
  • The final line provides a summary of the transaction and what transpired.
  • The journal is not part of the double entry system but rather acts as a diary.
  • Once an entry has been made it is recorded into the relevant accounts in the General Ledger.

To access more topics go to the Principles of Accounts Notes page.

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By | 2017-01-17T11:17:04+00:00 October 7th, 2015|Notes, Ordinary Level Notes, Principles of Accounts Notes|1 Comment

About the Author:

He holds an Honours in Accountancy degree from the University of Zimbabwe. He is passionate about technology and its practical application in today’s world.

One Comment

  1. tinotenda October 27, 2015 at 12:34 pm - Reply

    very interesting

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