Bookkeeping Journal in Accounting

A bookkeeping journal is a book of prime entry sometimes referred to as a book of original entry or day-book, and is used to record transactions if chronological (date) order from original accounting source documents.

Sub-Divisions of the Journal

The purpose of the bookkeeping journal is to avoid cluttering the general ledger with too much detail.

Journals allow the bookkeeping to be carried out by different staff with specialized accounting skills, saving time and money. In addition the separation of the bookkeeping allows for duties to be segregated and internal checks to be made reducing error and fraud.

In order to allow for similar transaction types to be grouped together and to ensure segregation of duties, the journal is usually sub-divided into the special journal and the general journal.

Special Journal

The special journal is usually sub-divided into a number of different journals depending on the requirements of the business. Each journal is used to make a chronological record of a specific type of transaction such as credit purchases or credit sales.

Examples of sub-divisions to the special journal are shown below, and further details on the use of each of the special journals listed can be found by following the links shown.

  • Purchases journal – Lists purchases on account with vendors and suppliers.
  • Purchase returns journal – Lists returns of purchases on account to vendors and suppliers, and is sometimes referred to as the returns outwards journal.
  • Sales journal – Lists sales on account with customers.
  • Sales returns journal – Lists returns of sales on account from customers, and is sometimes referred to as the returns inwards journal).
  • Cash disbursement journal – Sometimes referred to as the cash payments journal, used to list the payment of cash by a business.
  • Cash receipts journal – Lists the receipt of cash by a business.

Depending on the type of business, there might be additional special journals used such as for example, the payroll journal, bills receivable journal, or bills payable journal.

General Journal

The general journal is used to record transactions which do not belong in any of the other special journals such as adjusting entries and closing entries.

The use of this journal is more fully discussed in our General Journal in Accounting post.

The sub-division of the journal into general and special journals is summarized in the diagram below.

bookkeeping journal
Bookkeeping journal sub-division
(click to zoom)

Use of the Bookkeeping Journal

The bookkeeping journal simple lists transactions of a similar nature in date order. The entries in the journals are not part of the posting.

For example, if a sales journal is used, the individual line entries in the journal are used to update the personal accounts of customers in the subsidiary sales ledger, and assuming the business uses control accounts, the period totals in the journal are used to update the ledger book using the double entry posting shown below.

Sales journal totals used to post the ledger
Account Debit Credit
Accounts receivable control 3,000
Sales 3,000
Total 3,000 3,000

The posting of special journals to the ledger is more fully discussed in our special journals to general ledger entries tutorial.

Bookkeeping Journal in Accounting December 19th, 2017Team

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