Journal And The Purpose Of Having Journal(Part1of2)

JOURNAL:

· Are books in which information from source documents is first recorded hence is called Books Of Original Entry or Books Of Prime Entry.

· Also known as a day book as daily transactions of a business are recorded in order of date.

TYPES OF JOURNAL:

Journals can be classified as:

• Specialized journals like Sales Journal, Returns Inwards Journal, Purchase Journal and Return Outwards. Cash Receipt Journal,Cash Payment Journal)
• General Journal

PURPOSES or ROLE in the Accounting Process

• Records similar transactions such as credit sales of goods into one book in order of ate
• Cuts down unnecessary details in the ledger as only totals are posted to the ledger.
• Provides an important middle step between source documes and the ledger accounts and
• Acts as an aid for posting to the ledger by analyzing a transaction into its debit and credit entry.

Others:

• Journalizing means entering transaction data in the Journal
• The standar form and content of journal entries are as follows:
• the date
• the name of account to be debited and the amount
• the name of account to be credited and the amount
• a description and explanation of the transaction (ie narrative)
• a reference number for te source documents giving proof of the transaction.