Chapter 6.1

CHAPTER 6.1

THE JOURNAL

Chapter 6.1

THE GENERAL JOURNAL

• A book in which the accounting entries for all transactions are first recorded, before they are recorded in the ledger accounts

• Fills the need to record all parts of a transaction in one place

• Includes date, debit, credit and brief explanation• Advantages:

– Fewer errors– Easy to check all debit and credit entries

made– Chronological order– Gives idea of volume of business– Convenient picture of day’s business

Chapter 6.1

• Indent and enter the credit account(s)

Recording Journal Entries

Supplies 1 3 5 –

Bank

Letterhead and envelopes; cheque #40

12 Equipment

A/P—World Wide Fibre Optics

Network software installation; issued cheque

#41 with the balance due in 30 days.

12 0 0 0 –

Bank

10 0 0 0 –

2 0 0 0 –

1 3 5 –

• Enter the date

99Nov.Nov.20—20—

• Enter the debit account(s)• Write a brief explanation (at left margin)

• Enter the credit amount(s)• Enter the debit amount(s)• Skip a line and complete next entry

16

Chapter 6.1

General Journal Facts

Supplies 1 3 5 –

Bank

Letterhead and envelopes; cheque #40

12 Equipment

A/P—World Wide Fibre Optics

Network software installation; issued cheque

#41 with the balance due in 30 days.

12 0 0 0 –

Bank

10 0 0 0 –

2 0 0 0 –

1 3 5 –

99Nov.Nov.20—20—

16

• Account titles are capitalized• A “compound entry” affects more than two accounts

• Each journal entry balances• Consecutive page numbers

Chapter 6.1

Opening Journal Entry

1

• Amounts in the opening journal entry are the same as amounts on the opening balance sheet

Bank

Supplies

Equipment

Bank Loan

Opening financial position of Shirley Cassar

19 5 5 0 –

Shirley Cassar, Capital

10 0 0 0 –

1 4 0 0 –3030Oct.Oct.20—20—

Automobile

22 0 9 0 –

8 7 1 5 –

2 4 2 5 –