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.

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