Recording in General Journal
You will learn the purpose and format of general journal, how to identify the correct accounts to debit and credit, and how to record business transactions accurately using double entry principles in the general journal. This provides a strong foundation for posting entries into the ledger accounts.
The General Journal, together with the Sales Journal, Sales Return Journal, Purchase Journal, Purchase Return Journal, Cash Book and Petty Cash Book, make up the books of prime entry of a business.
Related Lessons:
Format Of General Journal
The general journal records all transactions that are not recorded in the other books of prime entry, and comprises of the following information:
1st column – Date
Records the date that the transaction occurs. It is a must to record the day, month and year of the transaction.
2nd column – Particular
Records all the accounts affected by the transaction, one account in each row.
3rd column – Debit
Records the amount for each account to be debited
4th column – Credit
Records the amount for each account to be credited
Recording in the General Journal
To record a transaction in the journal, we first record the date that the transaction happened.
Next, we identify the account that will increase in value and the account that will decrease in value.
Thereafter, we determine the nature of each account to decide which account will be debited and which will be credited.
We will first record the account to be debited under Particular column, and its amount under the Debit column.
On the next row, we will record the account to be credited under Particular column, and its amount under the Credit column.
When a transaction involves more than one account being debited or credited, the related accounts are always recorded together to show how they affect each other.
A journal is complete only when the total debit amount is equal to the total credit amount.