General Journal Definition, & Examples of General Journal

Examples of General Journals, Definition of General Journals, & Examples of General Journal Questions – Are you curious about general accounting journals?

You are not alone, because nowadays more and more people are interested in knowing more about journals because they want to apply better bookkeeping to businesses, no matter the scale or type of company.

For those who graduated from school or majored in economics, journaling may not be a difficult thing. But for the layman, this can be very confusing.

So if you also want to apply better bookkeeping to your business, then learning about general journals is the right step.

This is because this general journal is part of the stages in the recording of the accounting cycle. The results of this recording are then used as material for calculations in the next stage. It can also be said that the preparation of this general journal is the first step in preparing financial statements.

At first glance, the general journal itself is identical to a diary, of course, to record every debit and credit account transaction that occurs in a certain order.

Usually, as the first recording stage, transaction records in this general journal will contain details such as the date, nominal amount and the name of the transaction.

Even though it seems simple, the making of this general journal cannot be done arbitrarily and must still be based on basic accounting knowledge as well, considering this is also related to the existence of the business.

This article will invite you to find out about general accounting journals, from understanding, how to make them, to examples that might be used as references. Understanding the basics of making and the appropriate steps, the general journal will show you the valid nominal for consideration of various crucial steps in your business.

Understanding General Journal in Accounting

When viewed in terms of etymology, the word journal comes from the word Jour (French), which means day. The journal itself is used to record various activities chronologically based on date or daily order which then contains the relevant details.

While the word general is used because various transactions are recorded in the journal, it cannot be recorded in a special journal. The general journal itself is also widely known as a general ledger.

In accounting, the general journal contains details including the name of the transaction, account group and nominal in the debit or credit column.

Then it can be briefly concluded that the notion of a general journal in accounting is a journal that is used to record any existing evidence of all financial transactions over a certain period of time systematically and chronologically which can facilitate financial management by internal and external companies.

In addition, a general journal, in simple terms, can also be said to be a journal that is used to record various transactions that cannot be recorded in a special journal.

As it is known that this special journal includes the income journal, cash receipts journal, purchase journal and cash payment journal. Because as is known there are still various other journals in accounting, such as adjusting journals, closing journals and reversing journals.

The Purpose of Making a General Journal

From the explanation of the definition of a general journal above, you may already be able to estimate the purpose of making a general journal for the company.

Well, in general, general journals are made with the aim of identifying and doing various things related to financial transactions. In more detail, the purpose of making a general journal, or also referred to as journaling, can be described as follows:

  • To identify each transaction that occurs
  • To determine the transaction value
  • To record the economic impact of transactions
  • To facilitate the process of transferring the impact of the transaction to the appropriate account

From the description of the purpose of journaling above, it can be seen that general journals are more widely used in the bookkeeping of a service company than a trading company.

The reason is because all transactions in a service company will be recorded chronologically. In contrast to a trading company, which is more effective when applying accounting by making special journals.

Basic Principles in Making a General Journal

To be able to record systematically in an accounting general journal, there are several basic principles that must always be considered. The basic principles in making this general accounting journal include:

  • Identify various kinds of evidence of transactions that take place within the company, including memos, receipts, notes, invoices and so on.
  • Identify which account is affected by the transaction and then classify whether it includes the type of debt, assets or capital.
  • Identify the occurrence of a reduction or addition to the account relevant to the transaction in question.
  • Identify the occurrence of a credit or debit to the relevant account of the transaction.
  • Record transactions in the general journal based on evidence of transactions.

General Journal Function

From the definition of a general journal, it can be seen that the basic function of this journal is as a place to record all financial transactions during a certain period in a systematic and chronological manner.

While in practice, the general accounting journal has an important function as described below:

1. Historical Function

Because journaling is done chronologically, all transactions are recorded in order of date and applied daily. The general journal can then also describe the company’s activities every day, sequentially and continuously.

This is what makes the general journal have a historical function, which records all transaction records systematically, making it easier to track history and so on.

2. Logging Function

Like other journals, of course, general journals also have a function as recording or documentation. This is because every transaction that occurs within the company will always be recorded in the general journal.

This means that any changes in capital, costs, wealth or income, will be first recorded in the general journal which is then used as material for preparing financial statements at the end of the period.

3. Analysis Function

Although it looks like a diary, in fact inputting data in a general journal is also not done randomly. Each record or transaction record in the general journal is the result of transaction analysis.

Transactions are identified as credits and debits which also include the classification of the accounts, and the value of the transactions. Thus, general journals are also eligible to have an analytical function.

4. Instruction Function

In addition to the three functions mentioned above, it turns out that the general journal is not just a diary because it also has an instructive function in the process of inputting data in the ledger.

This is because the recording in the general journal does not stop only as transaction documents, but also in the form of instructions for credit or debit.

5. Informative Function

As a note, of course the general journal contains a large amount of information and details related to the evidence of recording transactions that have occurred. With the existence of a general journal, various relevant information can facilitate the company’s internal and external parties in financial management matters.

General Journal Benefits

General accounting journals can indeed be applied by trading and service companies. However, based on the details of its function above, the general journal offers benefits for companies that implement it. The benefits of a general journal for companies, among others:

  • To find out information regarding the addition or subtraction of an estimate.
  • To find out the amount to be recorded in an estimate or more.
  • To find out the amount to be debited or credited, which should be balanced in value.
  • To find out the amount that has been uploaded to the correct estimate in the general ledger, according to the details (work) is accompanied by a mark (reference).
  • To find out the amount that has been uploaded to the correct estimate in the general ledger, according to the estimate number is accompanied by a (reference) mark.

How to Make an Accounting Journal

If you intend to keep a general journal, then there are several things that you need to know so that your efforts in recording will later provide optimal results. Here are 3 things you need to do to keep a systematic general journal:

1. Understand the Accounting Equation

Of course you need an understanding of the accounting equation, in order to be able to identify how to enter transactions into the journal, including determining the account used to determining the debit and credit sides. While the basic accounting equation is:

Assets = Debt + Capital

Then it can be redefined as:

Assets = Debt + Capital + (Revenue – Expense)

By understanding these basic accounting equations, it will be easier for you to identify groups of accounts. For example, inventory is categorized as an asset group. Likewise, accounts receivable are also included in assets, and so on.

You also need to understand about the normal balances of each of the 5 accounts in the general journal. So that when a transaction occurs, you can determine the category quickly. The five accounts that you need to know the normal balance for are as illustrated in the following table

Account Normal Balance Table

AccountdebitCreditNormal Balance
Assets (assets/assets)IncreaseReducedebit
Debt (liabilities)ReduceIncreaseCredit

Description of the normal account balance table:

  • When assets increase, then you can record it on the debit side. Meanwhile, if the asset is reduced, you can record it on the credit side. While the normal balance of this asset account is on the debit side.
  • For a debt (liability) account, it is the opposite of an asset account where when debt increases, you record it on the credit side. Meanwhile, if the debt is reduced, it is recorded on the debit side. The normal balance of this accounts payable is on the credit side.
  • Next is the capital account, which has the same nature as the debt account. If the capital increases, it is recorded on the credit side while when the capital decreases, it is recorded on the debit side. For capital accounts, the normal balance is on the credit side.
  • No different from the income account which is also the same as the debt account and capital account. When income increases, it is recorded on the credit side. Meanwhile, if the income decreases, it is recorded on the debit side. The normal balance for this income account is on the credit side.
  • For the expense account, the recording is the same as the asset/asset account where when the expense increases, it is recorded on the debit side. Meanwhile, when the burden is reduced, you can record it on the credit side. For expense accounts, the normal balance is on the debit side.

2. Collect and Identify Proof of Transaction

After you understand the basic accounting equations that are part of the knowledge, then you can start collecting evidence of transactions that form the basis for recording transactions in journals.

Evidence of this transaction includes notes, invoices, invoices and receipts which can then be identified in the next process.

You need to make sure that only transactions that can change financial position are recorded in the journal where in each transaction, there are at least 2 accounts that will be affected.

This means that not all transactions can be entered in the general journal. To make it easier for you to identify whether a transaction has an impact on the company’s monetary position, you can also take advantage of the basic accounting equations, namely:

Assets = Debt + Capital

3. General Journal Recording

After sorting which transactions can be recorded in the general journal and categorizing them, you can start journalizing using the double-entry system.

This system records every transaction that has an impact on 2 financial positions, namely debit and credit, in the same amount. The general journal writing format that you can use is as follows:


Examples of Cases and General Journal Questions

Before you start journaling immediately, there’s nothing wrong with listening to the following illustration, which can then be used to compile an example of a general journal for the company Holy Days, LC.

Collecting Proof of Transaction

  1. On January 5, 2020, Mr. Hary made an investment in his company, Super Duper Holy Days, LLC, worth $. 500,000,000.
  2. On January 11, 2020, $ 20,000,000 was paid for office rent for 1 year.
  3. On January 15, 2020, purchased office equipment and supplies with a value of $. 10,000,000 and $. 5,000,000, respectively.
  4. On January 20, 2020, received cash income from sales of $. 10,000,000.
  5. On January 31, 2020, paid January employee salaries of $. 20,000,000.

Transaction analysis or identification

  1. The investment capital deposit makes the company’s assets then increase in the form of $. 500,000,000 cash (debit), meaning that Mr. Hary’s capital increases to $. 500,000,000 on the credit side.
  2. The company’s assets (cash) are reduced by $. 20,000,000 (credit) to pay rent. The Company has assets in the form of prepaid rent of $. 20,000,000 (debit).
  3. The company’s assets, each equipment is increased by $. 10,000,000 and equipment by $. 5,000,000. However, the company’s cash assets were reduced by $. 15,000,000.
  4. Profit (from sales) makes income increase on the credit side of $. 10,000,000. The company’s assets (cash) increased by $. 10,000,000 (debit).
  5. Salary expense $. 25,000,000 (debit). Meanwhile, the company’s assets (cash) were reduced by $. 25,000,000 (credit).

Examples of General Journal Questions

Super Super Holy Days, LLC

General ledger

As of January 31, 2020

5 Jan 2020Cash

Initial capital

11 Jan 2020Prepaid lease


15 Jan 2020Equipment





20 Jan 2020Cash


31 Jan 2020Salary expense



By studying to the illustrations and examples of general journals above, you can study them as a reference when you want to compile your own journal.

Make sure you consistently and thoroughly do the recording step by step starting from collecting transaction evidence, identifying and making input in the general journal. That way, you can get a valid amount when you enter it in the company’s accounting ledger.

That’s an explanation of the meaning, how to create and examples of general journals that you can learn and apply to your business.

With its characteristics similar to a diary, this general journal can quite a lot facilitate the administration of various businesses so that they can have more structured financial management.

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