Journals

General journal

The general journal is where double entry bookkeeping entries are recorded by debiting one or more accounts and crediting another one or more accounts with the same total amount...

 record transactions

Financial transaction

A financial transaction is an event or condition under the contract between a buyer and a seller to exchange an asset for payment. It involves a change in the status of the finances of two or more businesses or individuals.-History:...

 over a specified time in DATE ORDER using double-entry bookkeeping

Double-entry bookkeeping system

A double-entry bookkeeping system is a set of rules for recording financial information in a financial accounting system in which every transaction or event changes at least two different nominal ledger accounts....

. Each transaction is also recorded in the ledger

General ledger

The main accounting record of a business which uses double-entry bookkeeping. It will usually include accounts for such items as current assets, fixed assets, liabilities, revenue and expense items, gains and losses. Each General Ledger is divided into debits and credits sections. The left hand...

, which helps detect transcription errors. All transactions are classified by type into appropriate journals.

Source documents

When a transaction occur between a business and an external party, a source document will usually be created. Source documents are business forms that provide evidence of each transaction and give the details that are entered later into a one of the journals in a computer accounting system. Some computer systems, such as payroll systems, also generate transactions that are recorded in one or more journals, but without paper source documents.

• Receipt when a business receives money or cheques over the shop counter it will usually issue a receipt. A receipt is a document that acknowledges that money or cheques have been received.
• Check book stub
• Invoice includes business name (sellers) and address, invoice
  Invoice
  An invoice or bill is a commercial document issued by a seller to the buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer. An invoice indicates the buyer must pay the seller, according to the payment terms...
  
   number, ABN, buyer details, date, description of goods purchased, quantity, unit price, amount (per item x quantity), total price and GST
  GST
  -Computing:* Generalised suffix tree, a tree-like data structure* GNOME System Tools, part of the GNOME desktop environment* GNU Smalltalk, an implementation of the Smalltalk language* GST Computer Systems, a group of companies based in Cambridge, England...
  
  . An invoice is a document that records the details of a credit sale of inventory
  Inventory
  Inventory means a list compiled for some formal purpose, such as the details of an estate going to probate, or the contents of a house let furnished. This remains the prime meaning in British English...
  
  . The origin of the invoice is either delivered with the goods or sent separately to the customer. A number of copies are kept by the seller.
• Delivery note is a document that sets out the type and quantity of the inventory delivered to the purchaser. When the inventory arrives at the premises of the purchaser, the delivery note is signed by the purchaser and is evidence that the goods ordered have been delivered. A copy is kept by the seller.
• Purchase order
• Purchase requisition
• Credit note is a document issued by a seller that acknowledges that a customer is entitled to receive a reduction in the amount owing on goods purchased on credit.

Folio Number: Every page of a journal is numbered. This number is known as a folio number. The folio number is used as a cross reference between the journal and the ledger accounts. The use of folio numbers makes it easy to refer back from the ledger account to the journal entry or forward from the journal entry to the ledger account. In addition, folio numbers are a check that all journal entries have been recorded in the ledger system.

Each ledger account has a folio number column. The name and page of the journal from which the ledger entry came is recorded in the folio number column.

Each journal has a folio number column. The number of the ledger account to which the journal entry was posted is recorded in the folio number column of the journal.

Cash money, eftpos, cheques, credit cards. Receipts and payments.

Credit sale of inventory on credit Purchases.

Cash Journals record items sold or purchased with cash and they also record income received (debtor payment, interest) and daily expenses.
If the transaction is of a cash nature, you must be convinced that money/cheque/credit card was also exchanged at the time that the good or service was exchanged.

Credit Journals record purchases or sales on credit.
If the transaction is of a credit nature, you will assume that the cash will be exchanged after the exchange of the good or service. At this stage, these will only be concerned with your firm acquiring stock and the selling of that stock to customers who will pay later.

Sales Journal

Sales Journals record transactions that involve sales on credit.
Source documents here would probably be invoices.
Provides a chronological record of all credit sales made in the life of a business.
Credit sales are transactions where the goods are sold and payment is received at a later date.
The source documents for the Sales journal are copies of all invoices given to the debtors.

Double entry Accounting is achieved by:

• Debit – debtors account with value of sales (increasing a current asset)
• Credit – sales account with total amount (increasing income)

Choose credit sales journal if this stock is then on-sold to customers who will pay later. The people/organizations here are known as debtors. Collectively, all these accounts that are to be paid to us by our customers are known as assets.

date	details	folio #	invoice #	amount
date sale was made	who did you sell it to		sequential - #order

Purchases Journal

Purchases Journals record transactions that involve purchases on credit.
Source documents here would probably be invoices.
The purchase of inventory on credit is recorded in the purchases journal.

date	details	folio #	invoice #	amount
date sale was made	who you received payment from		not sequential

Cash Receipts Journal

Cash Receipts Journal record transactions that involve payments received with cash
Source documents would probably be receipts and cheque butts.
The CRJ records the cash inflow of a business.
Discount allowed is an expense as the discount allowed is the cost to the seller of obtaining an inflow of cash from a debtor weeks earlier than would be the case

date	details	receipt #	discount allowed	sales	debtors	Other	BANK
date sale was made	who you received payment from				people who are also in sales journal	other types of income description	amount into bank

Cash Payments Journal

Cash Payments Journals record transactions that involve expenditures paid with cash
Source documents would probably be receipts and cheque butts.
The CPJ records the cash outflow of a business.
If the owner of a business withdraws cash from the business an entry is made in the cpj.
Discount received is the cash discount received by a purchaser, it is an income item for the purchaser.

date	details	cheque #	discount received	purchases	creditors	Other	BANK
date payment was made	who you paid				people who are also in purchases journal	other types of expenses description	amount out of bank