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    General Journal Description | Entries | Example


    General Journal Description

    The general journal is part of the accounting record keeping system. When an event occurs that must be recorded, it is called a transaction, and may be recorded in a specialty journal or in the general journal.

    There are four specialty journals, which are so named because you record specific types of routine transactions in them. These journals are:

    • Sales journal
    • Cash receipts journal
    • Purchases journal
    • Cash disbursements journal

    There could be more specialty journals, but the four accounting areas represented by these journals contain the bulk of all accounting transactions, so there is usually no need for additional journals.  Instead, by default, all remaining transactions are recorded in the general journal.

    General Journal Entries

    Examples of transactions recorded in the general journal are:

    • Asset sales
    • Depreciation
    • Interest income and expense
    • Stock sales

    Once entered, the general journal provides a chronological record of all non-specialized entries that would otherwise have been recorded in one of the specialty journals.

    Journal Entry Format

    Transactions are recorded in all of the various journals in a debit and credit format, and are recorded in order by date, with the earliest entries being recorded first. These entries are called journal entries (since they are entries into journals). Each journal entry includes the date, the amount of the debit and credit, the titles of the accounts being debited and credited (with the title of the credited account being indented), and also a short narration of why the journal entry is being recorded.

    General Journal Accounting Example

    An example of a journal entry that would be recorded in the general journal is:

    Date Account Debit Credit
    June 30 Depreciation expense 10,000  
           Accumulated depreciation   10,000
      To record depreciation for the month of June


    Journal Process Flow

    After the transactions are recorded in these journals, you "post" the summary of all the transactions in each journal to the general ledger, which contains all of a company's accounts. An account is a separate, detailed record associated with a specific asset, liability, equity, revenue, or expense item. Examples of accounts are:

    • Accounts Receivable (an asset account)
    • Accounts Payable (a liability account)
    • Retained Earnings (an equity account)
    • Product Sales (a revenue account)
    • Cost of Goods Sold (an expense account)

    In summary, you record an accounting transaction into a journal, and then post the information in the journal 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.

    Other Issues

    The general journal was more visible in the days of manual record keeping. With nearly everyone now using accounting software to record their accounting transactions, it is not so readily apparent. Instead, the software makes it appear as though all transactions center around the general ledger, with no specialty journals in use at all.

    Related Topics

    Double entry accounting 
    General ledger overview

    The trial balance 
    What are accounting adjustments?
    What are the steps in the accounting process?