ACC CORRECTION OF ERRORS

What is a journal?

A journal is a chronological record of the transactions of a business entity. It is a form of diary that is used to record transactions before they are posted to the related ledgers. There are two basic types of journal: special and general journals. A special journal is designed in a tabular form to record one type of transaction involving sales and purchases. Examples of special journals are sales journal, purchases journal, sales return journal and purchases return journal. Sales journal also referred to as sales day book is used as a diary for recording all sales transactions on credit before the aggregated amount at the end of the period is posted to sales account and the individual transactions are posted to the respective accounts of the trade debtors Like the sales journal, the purchases journal is used to keep daily track of purchases on account or credit. The same procedures are followed in entering transactions of purchases returns and sales returns. The general journal is a chronological record of the transactions of a business entity analysed in terms of debits and credits and accompanied by narrations. A narration is the explanation that clarifies why the entry is made. The general journal enables the double-entry of a transaction to be treated as it records both the debit and credit sides of a transaction by identifying and naming the accounts to be debited and credited. It can be used to perform a similar function like the ledger in addition to its advantage of having a narration relating to the events recorded. The accounting process of entering transactions into the journal is called journalising. A general journal records transactions according to the manner in which they will be posted to the respective accounts in the ledger. For example, when the owner of a business invests cashof N100,000 into his business, the usual postings in the ledger would be to debit Cash Account with N100,000 and credit Capital Account with N100,000. This means that two separate accounts would be opened, that is, cash account and capital account. The journal records the transaction to cash and capital accounts as one event followed by a narration as shown below: