Journals - BC Bookkeeping Tutorials|dwmbeancounter.com

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Journals

Introduction
Journal Definition
A Journal is an accounting record that is used to record the different types of transactions using various source documents.

Journals are often called or referred to as the books of original entry. The reason is that this is the first place that business transactions are formally recorded.

Specialized Journals are journals used to initially record special types of transactions such as sales, cash disbursements, and cash receipts in their own journal. All these journals are designed to record special types of business transactions and post the totals accumulated in these journals to the General Ledger periodically (usually once a month).

You can think of a Journal as a Financial Diary.

The General Journal is used to record unusual or infrequent types of transactions. Type of entries normally made in the general journal are depreciation entries, correcting entries, and adjusting and closing entries.

The Cash Disbursements Journal is a special journal that is used to record all cash that is paid out by a business except for payroll.

The Cash Receipts Journal is a special journal that is used to record all receipts of cash.

The Sales Journal is a special journal where sales of services and merchandise made on account (business's customer is allowed to charge purchases) are recorded.

The Purchases Journal is a special journal that is used to record all purchases and various expenses and other charges from suppliers that a business has an open account with (supplier allows the business to charge purchases).

The Payroll Journal is a special journal that is used to record and summarize salaries and wages paid to employees and the deductions for taxes and other authorized employee withholding amounts. This introductory tutorial does not cover the payroll accounting process and records.

The Sales Return & Allowances Journal is a special journal that is used to record the returns and allowances of merchandise sold on account.

The Purchase Returns & Allowances Journal is a special journal that is used to record the returns and allowances of merchandise purchased on account.

Why Use Special Journals
  • Groups and records transactions of a like nature. A familiar example is recording all cash received by a business in one place.
  • Saves time with summary and less frequent postings to the General Ledger.
  • Allows a business to have different individuals responsible for different journals thereby increasing internal controls and allocating the record keeping workload.




What's Next ?

The Introduction Video.
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