Journal

Journals

Looking at the ledger account alone, it is difficult to trace back all the accounts that were affected by a transaction. For this reason, another book is used to record each transaction as it takes place and to show all the accounts affected by the transaction. This book is called the General Journal, or Journal.

Each transaction is first recorded in the journal and then the appropriate entries are made to the accounts in the G/L. Because the journal is the first place a transaction is recorded it is called the book of original entry. The advantage of the journal is that it shows all the accounts that are affected by a transaction, and the amounts the appropriate accounts are debited and credited, all in one place.

Also included with each transaction is an explanation of what the transaction is for. Transactions are recorded in the journal as they take place, so the journal is a chronological record of all transactions conducted by the business. There is a standard format for recording transactions in the journal. A journal transaction usually consists of the following:

• Journal Transaction Number

• Transaction Date

• Journal Type (General Journal, Sales Journal etc.)

• Actual Journal entries adjusting the account balances

In addition to the General Journal, other specialized journals contain entries from other accounting modules to track sales, purchases, and the disbursement of cash. Some of the important journals are:

• Invoice Journal Report

• The Cash Receipts Report

• The Purchases Journal

• A/P Journal (Transactions & Payments) Reports

This program comes with sample chart of accounts already installed. If you prefer, you can modify these accounts or create your own chart of accounts. In addition, all the Debits, Credit, and Journals are automatically maintained for you. When you create invoices, checks and other transactions in the system all the journal entries are created for you automatically. It is that easy!