Journal

Definition

A journal is a detailed account that records all the financial transactions of a business, in chronological order. It serves as the first point of entry for business transactions before they are posted to the general ledger.

5 Must Know Facts For Your Next Test

1. Journals record transactions in chronological order, making it easier to track and verify financial information.
2. Each entry in a journal typically includes the date, accounts affected, amounts debited and credited, and a brief description.
3. The process of recording entries in the journal is often referred to as 'journalizing'.
4. Journals can be specialized (e.g., sales journal, purchase journal) or general based on the type of transaction recorded.
5. Journal entries must follow the double-entry accounting system, meaning every debit has an equal and corresponding credit.

Related terms

General Ledger:

A comprehensive collection of accounts that provides detailed information about all financial transactions.

Double-Entry Accounting:

An accounting system where every entry to an account requires a corresponding and opposite entry to a different account.

Trial Balance:

A statement that lists all closing balances from the ledger accounts at a particular point in time.