General journal description Entries Example

general journal examples

It is short-term debt, meant to be paid soon, like the phone bill, utility bill, etc. You are likely to make mistakes when using journals, thus, you can easily check for mistakes by adding both sides of your journal entry together. If they do not equal the same number, then there is an error nd you should know that something has gone wrong. A brief description known as narration is also written in this column below the credit part of the entry. 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).

  • 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.
  • This is why it is also known as the book of original entry, chronological book, or daybook.
  • In the journal, two aspects of every transaction are recorded, following the double-entry system of accounting.
  • The entry made in the debit and credit columns states the dollar amounts that have been spent or that need to be transferred between accounts.

When making an entry you must always debit the receiver and credit the giver. Also, you have to debit all expenses and losses and credit all incomes and gains. The description of the transaction assists bookkeepers and accountants to recall what exactly happened on a certain date or why a transaction occurred. For instance, a description for a general journal may be written as ‘To record equipment purchase‘ or ‘To record inventory payment’. 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.

General journal entries example 4

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. The purpose of a general journal is to help accountants and bookkeepers with the reconciliation of accounts and the creation of detailed financial statements. Working from left to right and top to bottom, the typical format of a general journal entry begins by stating the date (month and year) that a transaction took place. An Account Numbers column may be present to the right of the date, though this is largely a preference of the record keeper.

general journal examples

One of the main advantages of using General Journal is that it provides an exact details about all transactions. It provides a place to take any kind of transaction, even Trial Balance. The two headings are, a) account headings column b) date of entries column. The following transactions are related to Mr. John’s business. 5) Refer to the Chart of Accounts and replace “cash” with the appropriate account, which will usually end with “Payable” or “Receivable” such as Accounts Payable, Interest Receivable, etc. Our mission is to empower readers with the most factual and reliable financial information possible to help them make informed decisions for their individual needs.


Instead, the software makes it appear as though all transactions center around the general ledger, with no specialty journals in use at all. The recording of journal entries needs to follow the debit and credit roles. For example, expenses are increasing in debit, and revenues are increasing in credit. You will list it first, and then either Cash or Accounts Payable. An entry to record Payroll Expense would credit Wages Payable. An entry to record Interest Expense would credit Interest Payable.

general journal examples

The credit entry account title is indented, to help set it off from the debit account titles. These practices are used to make the journal entry easier to read, and reduce errors in posting. Some transactions do not involve sales, purchases, cash receipts, or cash payments, or are complex to fit conveniently into the general journal. The first book in which transactions are recorded is called the general journal.

Special journal:

The debit part of the entry is first written and the credit part of the entry is written below the debit part. It is usually expected that you leave some space at the left-hand margin before writing the credit part of the journal entry. In this column, a brief description known as narration is written below the credit part of the entry. Recording a transaction in the books of accounts is known as making an entry.

Journals are a useful tool in many applications, such as to record personal actions or to track transactions between two or more parties. Personal journals are a common way to chronicle and describe important dates, events, and thoughts so that they can be easily recalled in the future. Businesses use a similar method for tracking major purchasing and spending choices. The first entries for this example are related to cash transactions that shareholders inject into the entity for investment capital. That is the reason why we can see there is a debit to cash and credit to capital.


After analyzing a business transaction, it is recorded in a book known as the journal (or general journal). When a transaction is logged in the journal, it becomes a journal entry. 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. Expenses are increased in debit, so we need to debit the amount when we record it in the journal.

General Journal in Accounting

It is common to leave some space at the left-hand margin before writing the credit part of the journal entry. Click on the next link below to see how ledger accounts of Moon Service Inc. will be prepared. Notice that Sales Revenue is on the Credit side in both entries. Remember this and it will make all your journal entries easier. 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’s handy for accounting students, because you can make quite a few T-Accounts on one page, and post journal entries quickly. This makes it easier to do homework assignments or analyze transactions. Notice that the debit and credit values in each respective column were the same. This balance means that the appropriate amounts have been transferred between the specified accounts to create a balanced general journal for accounting.