A general journal is a daybook or subsidiary journal in which transactions relating to adjustment entries, opening stock, depreciation, accounting errors etc. are recorded. The source documents for general journal entries may be journal vouchers, copies of management reports and invoices. Journals are prime entry books, and may also be referred to as books of original entry, from when transactions were written in a journal before they were manually posted to accounts in the general ledger or a subsidiary ledger.

1. Financial Accounting
TOPIC 9
The General Journal

2. The journal
 The journal is a form of diary to record
unusual transactions before they are posted
in the double entry accounts.
 A journal entry contains:
The date
The account to be debited and the amount
The account to be credited and the amount
An explanation of the transaction
A folio reference to the source documents

3. Typical uses of the journal
The purchase and sale of fixed assets.
Writing-off bad debts.
The correction of errors in the ledger
accounts.
Opening entries to open a new set of
books.
Adjustments to any of the entries in
the ledgers.

4. A journal page

5. Purchase and sale on credit
of non-current assets
A milling machine is bought on credit
from Toolmakers Ltd for £10,550 on 1
July 2012.

6. Purchase and sale on credit
of non-current assets
(Continued)

7. Purchase and sale on credit
of non-current assets
(Continued)
Sale of van no longer required for
£800 on credit to K. Lamb on 2 July
2012.

8. Purchase and sale on credit
of non-current assets
(Continued)

9. Bad debts
A debt of £78 owing to us from H.
Mander is written off as a bad debt on
31 August 2012.

10. Bad debts (Continued)

11. Correction of errors
J. Brew, after being in business for
some years without keeping proper
records, now decides to keep a double
entry set of books. On 1 July 2012 he
establishes that his assets and
liabilities are as follows

12. Correction of errors (Continued)
Assets
Van – £3,700
Fixtures – £1,800
Inventory – £4,200
Accounts
receivable:
B. Young – £95
D. Blake – £45
Bank – £860
Cash – £65
Liabilities
Accounts payable:
M. Quinn – £129
C. Walters – £410

13. Correction of errors (Continued)

14. Correction of errors (Continued)

15. Adjustments to any of
the entries in the ledgers
K. Young, a debtor, owed £2,000 on 1
July 2013. He was unable to pay his
account in cash, but offers a 5-year-
old car in full settlement of the debit.
The offer is accepted on 5 July 2013.

16. Adjustments to any of
the entries in the ledgers
(Continued)

17. Adjustments to any of
the entries in the ledgers
(Continued)
T. Jones is a creditor. On 10 July 2013
his business is taken over by A. Lee to
whom the debt of £150 is now to be
paid.

18. Adjustments to any of
the entries in the ledgers
(Continued)

19. Adjustments to any of
the entries in the ledgers
(Continued)
We had not yet paid for an office
printer we bought on credit for £310
because it was not working properly
when installed. On 12 July 2013 we
returned it to the supplier, RS Ltd. An
allowance of £310 was offered by the
supplier and accepted. As a result, we
no longer owe the supplier anything
for the printer.

20. Adjustments to any of
the entries in the ledgers
(Continued)

21. The accounting cycle for a
profit-making organisation

22. Thank You!