The Journal and Source
Documents
The Journal
• Ledgers allowed us to see what changes transactions made to the accounts.
• These records were called entries.
• The problem? As companies grow, it becomes complicated to figure out
exactly what happened.
• Information is in different pieces.
• What we need is to keep all parts of the transaction in one place.
The Journal
• The journal is a book that we keep the transactions in, before they go into
the separate ledger accounts.
• They are recorded in the order that they happen.
• The records are continuous, and you can see everything in one easy place.
The Two-Column General Journal
• Accountants have different uses for journals, depending on their needs.
• The first we will talk about is called the two-column general journal.
The Two-Column General Journal
Transactions Occur
• Journal entries are made up of all the changes in one transaction.
• Debits recorded first. Credits second
(and indented).
Transactions
are recorded in a
journal in order by date.
• Each one is explained. “What was the transaction for?”
• The whole process is called “journalizing.”
• Journals are called books of original entry. Everything goes into there first.
The accounting entries are
transferred to the ledger
accounts.
Journalizing in the Two-Column General
Journal
• Recording the date:
• The Year: Small figures, first line. Do not repeat for every entry, only when the
year changes.
• The Month: First line of each page. Do not repeat for each entry.
• The Day: First line of each entry. Repeated no matter how many times the
day is used.
Journalizing in the Two-Column General
Journal
Journalizing in the Two-Column General
Journal
• Step 2: Debit Accounts
• Step 2: Credit Accounts
Journalizing in the Two-Column General
Journal
• Step 4: Explanation
Journalizing in the Two-Column General
Journal
• Always check to see if the debits and the credits even out.
• Never let an entry go onto more than one page.
• If entries are made accurately when the occur, the rest of the work is made
easier.
• Things are also easy to find, because they are in chronological order.
The Opening Entry.
• The first entry that starts a book is called the opening entry. It is taken
from a balance sheet.