General Journal in Accounting Purpose, Entries & Examples Video & Lesson Transcript

Hopefully this article clears up any questions you have regarding general journals. You’ll learn what a general journal is for, how to complete an entry in a general journal, and more. Companies use many different journals depending on their accounting system and industry, but all companies use the general journal. These entries are recorded in the general journal shown below.

The column titled Post Ref (short for posting reference) is used to show what page the information was copied to when the transaction was posted to the ledger. The next columns that appear to the right of the Post Ref column are the Debit and Credit columns, with the credited account being placed one row below the debited account. These entry fields state the dollar amounts that have been spent or that need to be transferred between accounts. The total amount of dollars in the Debit column must equal the total dollars in the Credit column for each entry to be complete. This ensures that all accounts will balance and that multiple accounts (as many as needed) may be used on either side (Debit/Credit) of the general journal to accurately track spending.

In this case we will use Accounts Payable, one of the most frequently used accounts. Accounts Payable is used to refer to most of the common, day-to-day debts and current liabilities that a company incurs. It is short-term debt, meant to be paid soon, like the phone bill, utility bill, etc. This is an example of paying an expense, in this case Rent Expense. As you can see in the accrued interest journal entry template above, the key information that should be included at the top is the name of the entity and the period that the journal is recording. A brief description known as narration is also written in this column below the credit part of the entry.

  1. In summary, an accounting transaction is recorded into a journal, and then the information in the journal is posted into the accounts which are stored in the general ledger.
  2. You learned what general journals are, how to complete an entry, what they’re used for and more.
  3. The column titled Post Ref (short for posting reference) is used to show what page the information was copied to when the transaction was posted to the ledger.
  4. At least one line should be left blank before the next journal entry, and entries should not be split over more than one page.
  5. The general ledger sometimes displays additional columns for particulars such as transaction description, date, and serial number.

In summary, an accounting transaction is recorded into a journal, and then the information in the journal is posted into the accounts which are stored in the general ledger. The general journal is the repository for transactions that are not recorded in a specialty journal. Thus, the general journal can be considered an intermediate repository of information for some types of information, on the way to its final recordation in the general ledger. The dates on the general journal are usually elaborated in a two-column format, with the first column containing the month and the second column containing the year. Several bookkeepers choose to enter the specific day with the description of each entry.

General Journal Examples – Entries and Calculations

The journal, also known as the general journal, is involved in the first phase of accounting because all transactions are recorded in it, originally in chronological order. It is important that a business continues to maintain their general journal and make accurate entries regularly so that all costs may be realized and so that all funds may be allocated as needed. When a general journal is successfully created and correctly formatted, accountants can easily track spending and identify any discrepancies that may exist. Matching Principle – offsetting expenses against revenues in the appropriate time period. For instance, the bill for June’s long distance phone calls is paid in July.

What Is a General Journal?

This should be additional information that is not contained in the journal entry itself; information that will be useful when trying to reconstruct events at a later date. Enter the month once on a page, and put the day in front of each journal entry on the page, even if they are all on the same date. You should also leave one or two blank lines between journal entries on a page. Expenses are increased in debit, so we need to debit the amount when we record it in the journal. If the entity pay by cash, then credits the same amount to cash.


Additional information that should include is a reference and, more importantly, is debit and credit. Thus, the general journal is a catch-all location for the initial entry of certain transactions that do not occur in sufficient volumes to deserve recordation in a specialized journal. These transactions are recorded in chronological order, which makes the general journal an excellent place in which to research accounting transactions by date. Recording a transaction in the books of accounts is known as making an entry. When a transaction is recorded in the journal, it is known as a journal entry.

These entries are called journal entries (since they are entries into journals). In manual accounting information systems, a variety of special journals may be used, such as a sales journal, purchase journal, cash receipts journal, disbursement journal, and a The transactions recorded in a general journal are those that do not qualify for entry in any special journal used by the organisation, such as non-routine or adjusting entries. A general journal is a daybook or subsidiary journal in which transactions relating to adjustment entries, opening stock, depreciation, accounting errors etc. are recorded. The source documents for general journal entries may be journal vouchers, copies of management reports and invoices.

What is the approximate value of your cash savings and other investments?

Most states permit Par value stock, and some have a Legal Capital rule, forcing corporations to maintain tangible capital equal to the Legal Capital. It is used to record beginning balances, additions and deductions. The top of the page shows what has been added to the account. We follow strict ethical journalism practices, which includes presenting unbiased information and citing reliable, attributed resources.

An Account Numbers column may be present to the right of the date, though this is largely a preference of the record keeper. The next rightward column is the Account Titles column and an explanation of the purchase that has been made. The Post Ref column appears next to state which page of the ledger that an item was posted and the Debit and Credit columns follow, respectively. The total dollar amount in the Debit column must equal the total dollar amount in the Credit column for the entry to balance.

In contrast the other two items do not involve a subsidiary ledger and an entry it not required. This article discussed a variety of topics related to general journals. You learned what general journals are, how to complete an entry, what they’re used for and more.

Notice that Sales Revenue is on the Credit side in both entries. Remember this and it will make all your journal entries easier. When you record a revenue you will put it on the Credit side. States also allow Preferred stock, which pays a fixed dividend, similar to an interest-bearing investment. Preferred stock usually has a Par value, and is recorded as in the example above, except the Preferred Stock account is used. Some company’s maintain a separate account Additional Paid-In Capital on Preferred Stock, but Additional Paid-In Capital usually reverts to the Common stockholders, regardless of it’s source.

General journal

The year, month, and date of the transaction are written in the date column. It is written once per page (i.e., it does not have to be repeated for every entry on the page). Whenever cash is received, the Cash account is debited (and another account is credited).

The final part of a general journal entry is a short description of the transaction that helps to remind the record keeper of what happened at the time. A general journal in accounting, when applied to business, is a master book of all financial transactions that a business has made. Most general journals cover the scope of one fiscal year, with a new general journal being created at the beginning of a new fiscal year.

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