The general journal is part of the accounting record keeping system. When an event occurs that must be recorded, it is called a transaction, and may be recorded in a specialty journal or in the general journal. The general journal is sometimes called the book of original entry. This means that source documents are reviewed and interpreted as to the accounts involved. Then, they are documented in the journal via their debit/credit format. As such the general journal becomes a log book of the recordable transactions and events. The journal is not sufficient, by itself, to prepare financial statements. That objective is fulfilled by subsequent steps. But, maintaining the journal is the point of beginning toward that end objective.
Examples of transactions recorded in the general journal are:
Once entered, the general journal provides a chronological record of all non-specialized entries that would otherwise have been recorded in one of the specialty journals.
Transactions are recorded in all of the various journals in a debit and credit format, and are recorded in order by date, with the earliest entries being recorded first. These entries are called journal entries.
Each journal entry includes:
- Asset sales
- Depreciation
- Interest income and expense
- Stock sales
Once entered, the general journal provides a chronological record of all non-specialized entries that would otherwise have been recorded in one of the specialty journals.
Transactions are recorded in all of the various journals in a debit and credit format, and are recorded in order by date, with the earliest entries being recorded first. These entries are called journal entries.
Each journal entry includes:
- Date
- The amount of the Debit and Credit
- The title of accounts to be debited or credited
- Description of the transaction