VCE Accounting Unit 3. Video of this presentation can be found on my YouTube channel here https://www.youtube.com/channel/UCf5jyuJoYwie8tWfvjEc0zg.

1. 7.1
THE NEED FOR A
GENERAL JOURNAL

2. © Michael Allison. Author’s permission required for external use.
 There are 4 Special Journals for recording most of the firm’s transactions…
7.1 THE NEED FOR A GENERAL JOURNAL
Special Journals
Cash Receipts Journal
Records all cash received by the
firm
Cash Payments Journal
Records all cash paid by the
firm
Cash Journals
(Chapter 5)
Sales Journal
Records all credit sales made
by the firm
Purchases Journal
Records all credit purchases of
stock
Credit Journals
(Chapter 6)

3. © Michael Allison. Author’s permission required for external use.
 There are 4 Special Journals for recording most of the
firm’s transactions…
Cash Receipts Journal
Cash Payments Journal
Sales Journal
Purchases Journal
The firm paid a creditor $1,280
and received a $40 discount
The firm purchased stock on
credit for $4,000 plus $400 GST
The firm made a sale on credit
for $900 + $90 GST (cost price
$400)
The firm received $900 from a
debtor and gave a $140 discount
The firm made a cash sale of
$800 plus $80 GST (cost price
$350)
The firm paid $1,700 of wages
Special Journals
7.1 THE NEED FOR A GENERAL JOURNAL
Any cash received?
Any cash paid?
Credit sale made?
Credit stock purchase ?

4. © Michael Allison. Author’s permission required for external use.
Cash Receipts Journal
Cash Payments Journal
Sales Journal
Purchases Journal
The owner withdrew $500 of
stock for personal use
?
 There are 4 Special Journals for recording most of the
firm’s transactions…
Special Journals
7.1 THE NEED FOR A GENERAL JOURNAL
Any cash received?
Any cash paid?
Credit sale made?
Credit stock purchase ?

5. © Michael Allison. Author’s permission required for external use.
Cash Receipts Journal
Cash Payments Journal
Sales Journal
Purchases Journal
The owner gave the firm a
computer valued at $2,000
?
 There are 4 Special Journals for recording most of the
firm’s transactions…
Special Journals
7.1 THE NEED FOR A GENERAL JOURNAL
Any cash received?
Any cash paid?
Credit sale made?
Credit stock purchase ?

6. © Michael Allison. Author’s permission required for external use.
Cash Receipts Journal
Cash Payments Journal
Sales Journal
Purchases Journal
?The owner donated stock for
advertising purposes to a local
school for its annual Open Day.
 There are 4 Special Journals for recording most of the
firm’s transactions…
Special Journals
7.1 THE NEED FOR A GENERAL JOURNAL
Any cash received?
Any cash paid?
Credit sale made?
Credit stock purchase ?

7. © Michael Allison. Author’s permission required for external use.
Cash Receipts Journal
Cash Payments Journal
Sales Journal
Purchases Journal
?One of the firm’s debtors has
declared bankruptcy and must
be written off as a bad debt who
won’t repay the business
 There are 4 Special Journals for recording most of the
firm’s transactions…
Special Journals
7.1 THE NEED FOR A GENERAL JOURNAL
Any cash received?
Any cash paid?
Credit sale made?
Credit stock purchase ?

8. © Michael Allison. Author’s permission required for external use.
Special Journals
Cash Receipts Journal
Cash Payments Journal
Sales Journal
Purchases Journal
One of the firm’s debtors has declared
bankruptcy and must be written off as
a bad debt who won’t repay the
business
The owner donated stock for
advertising purposes to a local school
for its annual Open Day.
The owner gave the firm a computer
valued at $2,000
The owner withdrew $500 of stock for
personal use
None of these
transactions fit in any
of the Special Journals
Instead, these
transactions must go
in a General Journal
that records all “other”
transactions
General Journal
Records transactions
that do not belong in
the 4 Special Journals
7.1 THE NEED FOR A GENERAL JOURNAL
Any cash received?
Any cash paid?
Credit sale made?
Credit stock purchase ?

9. © Michael Allison. Author’s permission required for external use.
TASK
In-class Homework
SQ1 X
SQ2 X
Ex7.1 X