Journals in Accounting


Because the quantity of data to be recorded is so much, it is 'easiest' to summarise the information before posting the transactions in the general ledger. Journals facilitate this purpose by recording data from source documents and summarising this information before it goes to the general ledger.

General Journal: Used to record irregular 'one-off' transactions that do not fit into the four special journals.

Some common transactions it records include:

-Commencing the business (or double-entry accounting system).

-Purchasing a NCA (non-current asset) on credit.

-non-cash withdrawals by owner.

-non-cash contributions by owner.

-correcting entries.

-closing entries.

-adjusting entries.

Special Journals[1]:

[Used to record transactions that occur regularly]

Cash Receipts Journal (CRJ): Records all cash inflows, including discount expense (when debtors settle accounts) and cost of sales (of all cash sales).
Cash Payments Journal (CPJ): Records all cash outflows, and also discount revenue (when creditors' accounts are settled).
Sales Journal (SJ): Records all credit sales of stock, including its cost of sales.
Purchases Journal (PJ): Records all credit purchases of stock.
Control Accounts[2]: Used to summarise a group of similar accounts, showing the total transactions effect

relating to that particular area (eg: debtors, creditors, stock etc...).

>>Subsidiary Ledger: Additional record to the general ledger, showing the specific individual ledger accounts

that the control account has summarised. It records all the transaction details of that particular ledger account on date.

Posting (form journals): In this accounting study course, when posting to the general ledger from the journals,

we only need to post totals where possible, and all are dated on balance day (last day of the reporting period).

Sundries Column: Used to record infrequent transactions in the CRJ and CPJ that do not occur frequently

enough to warrant their own column.

[1] In Unit 4, all journals include a GST column.

[2] Discussed later in Unit 4, Recording.

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