Journals are also called books of original entry. In advanced bookkeeping frameworks, all transactions of the business are recorded in the general journal. It contains all the underlying entries used to record each pair of transactions (Debit and Credit) and the reason / details of the transactions. This procedure known as journalizing.

The distinction between T-Accounts and journals is that as opposed to utilizing different Ts for each particular account, you will now list all transactions in the same journal.

Here are a few sample transactions to be entered in the general journal

  1. deposited salary amounting to $1,500
  2. Paid money for rent expense amounting to $800
  3. Purchased an asset for $2,300 paying cash
  4. Paid a loan principal amounting to $500
  5. Telephone expense recorded as accounts payable amounting to $250

The journal records every transaction of the business in sequential order.

General Journal

1. Date

The date column incorporates the present year at the highest point of the first column, trailed by the month and day of the transaction. The journal entries are recorded in sequential order.

2. Description

There are always three lines for each transaction:

  1. First line shows the name of the account which is being debited
  2. On the second line credited account name appears
  3. Third line is the place where the description about the transaction is being mentioned.

3. General ledger account numbers

Chart of accounts shows the account number for each of the account. This account number will be mentioned in GL NO. column.

4. Debit or credit

There two columns shows the money value of the transaction recorded in the general journal.

5. Leave a space between journal entries

Some space between two journal entries should be maintained, so that, the journal entries do not mix up.

Above mentioned five items are shown in the following diagram.

General Journal - Journal Entry example

Special Journal Vs General Journal

Special journals are individual journals used to record specific transaction in that special journal. For example to record all sales transaction the organization can maintain a sales journal and for all purchase transactions a purchase journal. Similarly, cash receipt and payment journal can be used to maintain record of all transactions made with cash.

On the other hand, general journal is used to record miscellaneous transactions which does not fit in any of the special journal maintained by the organization. Also general journal is used to record non-routine transactions like sale of a tangible asset, sale of property, bad debts, depreciation etc.

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After reading this article you will be able to:

Additional Information

Debits and Credits

Chart of Accounts

Defining Accounts