What is a Journal?


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In the context of accounting, a journal refers to a record where all business transactions are initially documented in chronological order as they occur. This record is also known as the “book of original entry” or “daybook.”

The process of recording these transactions in the journal is known as “journalizing.” Each entry typically includes:

  1. The date of the transaction
  2. The accounts affected by the transaction
  3. The amounts to be debited and credited for the transaction
  4. A brief description or narration of the transaction

There are different types of journals based on the nature of the transactions, including:

  • Sales Journal: Records all credit sales transactions.
  • Purchase Journal: Records all credit purchase transactions.
  • Cash Receipts Journal: Records all cash received transactions.
  • Cash Payments Journal: Records all cash payment transactions.
  • General Journal: Records all other transactions that do not fit into the above categories, such as adjusting entries, error corrections, etc.

After transactions are recorded in the journal, they are then posted to the respective accounts in the general ledger, which provides a categorized record of all transactions, organized by account.

In the context of publishing and academics, a journal refers to a scholarly publication that contains a collection of articles written by researchers, professors, or other experts in a field of study. These journals are often peer-reviewed, meaning that the articles have been evaluated by other experts in the field for quality and validity.

Example of a Journal

I’ll provide an example of journalizing an accounting transaction. Let’s assume a business named “Healthy Food Inc.” made a cash purchase of inventory worth $5,000. Here’s how they would record this in their accounting journal:

DateAccount TitleDebitCredit
July 11, 2023Inventory$5,000

Explanation of the entry:

  • Date: The date the transaction took place, which in this case is July 11, 2023.
  • Account Title: The names of the accounts affected by the transaction. In this case, it’s “Inventory” (an asset account) and “Cash” (another asset account).
  • Debit and Credit: The dollar amounts for the debit and credit. In this transaction, “Inventory” is debited (increased) by $5,000 because assets increase on the debit side, and “Cash” is credited (decreased) by $5,000 because assets decrease on the credit side.
  • Typically, there would also be a brief description of the transaction (not shown in the table), for example: “Purchased inventory for cash.”

Later, this journal entry would be posted to the general ledger, where it would be used to update the balances in the Inventory and Cash accounts.

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