The types of journals in accounting
The general journal does not form part of the double-entry system. It is used as a guide to help ledger accounting staff to do their postings. New start-ups and other small business owners will not be able to progress in their businesses if they do not understand the general journal. An accounting journal for day-to-day operations is needed for budgeting and tax purposes.
Record financial transactions.
It is a place to record all your day-to-day transactions before posting them to the ledger. Most small businesses keep these records in sheets, spreadsheets, and accounting software. It protects you from missing transactions, helps from overspending, and stops the owners from withdrawing money for personal use. Easy to find any irregularities and bring the situation under control.
There are a few different types of journals there:
Purchase journal
It is where all the daily purchases on credit are entered, but the asset purchases are not registered in the purchase journal. Separate columns could show the different types of credit purchases if you buy an asset and office supplies enter in separate columns. The assets and supplies purchase is debited to the support and supplies account in the purchase journal, and the credit goes to the payables account in the general journal.
Sales journal
Here the credit sales are credited to the sales journal, and the receivable account is debited with the individual performances in the general journal. Cash received from cash sales is entered in the cash receipts journal.
Cash receipts journal
All the cash received from sales is entered in the cash receipts journal. All types of money accepted are joined in this journal, but mainly two types, money received from cash sales and the cash received from receivables. Different columns are used to register some money received from other ways as a loan secured from the bank and interest earned during that period.
Cash payments journal
The specialized journals record all the cash payments, and payments made by bank transfer are considered cash payments and entered in the same journal.
Purchase return journal
Purchases made on credit when returned for some reason are recorded in the specialized journal called the purchase return journal. Maybe for some reason, goods were returned to the seller, and some slips called debit notes. The seller also sends a letter to the purchaser accepting the goods returned called a credit note. However, these notes are not entered in the purchase return journal if the products were initially bought with cash.
Sales return journal
When goods sold on credit returned entered in the sales return journal. The sales return journal was prepared from the buyer’s debit notes with returned products. In reply, the seller sends a credit note when sales returns are mostly entered in the sales return journal, if not those recorded in the general journal.
The types of journals in accounting
Then let me show you the various types of journal entries in accounting that are as follows.
1. Opening Entry: The journal entry used at the beginning of the current year for recording assets and liabilities of the previous year is called the first entry.
2. Closing Entry: The journal entries, which are used to close the periodic expenses and income transferring them to the income statement, are called closing entries. All revenue–cost, sales-purchase, and profit-loss accounts are completed through transfer to the income statement.
3. Adjustment Entry: The journal entry through which accrued expenses, income, advance income, expenses, depreciation, specific provisions, etc., are adjusted is called an adjustment entry.
4. Rectification Entry: The entry through which account errors are rectified is named rectification. In the event the mistakes made in postings are corrected using journal entries.
5. Transfer Entry: The listing created for transferring funds from one account to another account is called transfer entry.
6. Credit Purchase and Sale of Assets: The entry needed for recording transactions relating to credit purchase and sale of assets is called credit purchase and sale of assets entry.