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Slide Notes

Previously you recorded transactions in ledger accounts called T-accounts.

Remember that each T-account represents a separate page. T-accounts are not used in business but are simply used as a learning tool.
 
Ledger accounts do not cover all the needs of accounting.
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The Journal

Published on Feb 10, 2019

These slides introduce the concept of the General Journal and its necessity when recording transactions due to the tendency of transactions to become scattered in the various accounts.

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1.

The Journal

David Dickinson 
Previously you recorded transactions in ledger accounts called T-accounts.

Remember that each T-account represents a separate page. T-accounts are not used in business but are simply used as a learning tool.
 
Ledger accounts do not cover all the needs of accounting.
Photo by Jan Kahánek
2.

Ledger Accounts Revisited

  • In a ledger each transaction requires at least two entries. Each entry is recorded in a separate account.
  • Why might this pose a problem?
Remember that accounts are all recorded on separate pages. As the number of transactions that you have grows, pieces of the transactions become scattered throughout the ledger.

It becomes difficult to put the details of any one transaction back together. (Remember the challege of finding all of the pieces of a transaction when using t-accounts? well, this is harder because now the transactions are on different pages.

To solve this problem accountants use a record book called a journal.
Photo by melstampz
3.

The Journal

  • The book in which, accounting entries for all transactions are first recorded before being recorded in the ledger accounts.
  • Transactions are recorded separately and in the order that they occur.
A Journal entry includes all the accounting changes for one transaction.

The process of recording accounting entries in the journal is known as Journalizing.

The journal is known as the book of original entry.

WHY?.... ANSWER: Each balanced accounting entry is recorded in the journal, before it is recorded in the ledger
Photo by Eepeng Cheong
4.

Untitled Slide

Here is an example of a blank journal page.
5.

Recording the date & month in the Journal

  • Month and year:
  • First line of each page. Do not repeat for each entry. Enter a new month or year when it occurs.
  • Day:
  • First line of each journal entry
Photo by Manasvita S
6.

Untitled Slide

Here is an example of a filled in journal.

Note that the year month and day at the top of the column for the first entry are recorded. For the next entry only the day is recorded as the month and year are the same.

For the third entry the month has changed so it is recorded along with the day.

The day is always recorded for a new transaction regardless of whether it changes.
7.

Recording a Journal Entry

  • Step One
  • Enter the day in the date column.
  • Step Two
  • Enter the names of the account(s) to be debited on the far left side of the Particulars column. Enter the value(s) to be debited.
Usefulness Of The General Journal:

It allows for a continuous record of accounting entries.

It allows for checking transaction balances.

It can serve as a reference tool used when balancing the ledger.
Photo by Green Chameleon
8.

Recording a Journal Entry (Continued)

  • Step Three
  • Enter the names of the account(s) to be credited. Indent from the left side of the Particulars column Enter the value(s) to be credited.
  • Step Four
  • Write a brief explanation for the entry. Leave a space between this entry and the next.
Photo by Erol Ahmed

David Dickinson

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