General journal

The general journal is where double entry bookkeeping entries are recorded by debiting one account and crediting another account with the same amount. The amount debited and the amount credited should always be equal, thereby ensuring the accounting equation is maintained.

Depending on the business's accounting information system, specialized journals may be used in conjunction with the general journal for record-keeping. In such case, use of the general journal may be limited to non-routine and adjusting entries.

Format

A general journal entry includes:

1. The date of the transaction;
2. The title of account credited is indented several spaces
3. Titles of the accounts debited and credited;
4. The amount of each debit and credit; and,
5. An explanation of the transaction also known as a Narration.

Example

Acme, Inc carried out the following transactions in May 2009.

• 1 May: Received and paid telephone bill of $100 (cheque #0001)
• 4 May: Performed consulting services for Example LLP on credit, $350
• 6 May: Paid wages of $180
• 13 May: Example LLP paid for services performed on 4 May in full.
• 19 May: Performed consulting services for cash, $120
• 25 May: Purchased a computer for $2000. Paid $500 cash (cheque #0002), borrowed the remainder from the bank.

The above transactions may be journalized as follows:

See also

• Sales journal