What is an accounting journal?

What is an accounting journal?

An accounting journal is an area where information is recorded in journal format for particular entries. Think of it as a diary of financial events where you can see exactly what transpired at any particular time. These records are normally referenced to source documents and accounting ledger accounts.

In general a journal entry would include:



The date of the transaction;
Reference to the accounts debited and credited;
The amount of each debit and credit; and,
An explanation of the transaction also known as a transaction description

The journal entry could look like the below:

21/07
Dr Bank Account $25.00
    Cr Expenses Monthly Telephone Bill $25.00

Organisations would have a number of journals for financial accounting for example:

General Journal
Sales Journal
Sales Refund Journal
Purchasing Journal
Purchase Refund Journal
Cash Journal
Non-cash Journal
Petty-cash Journal

Journals are a handy way of knowing what transactions have occurred for the appropriate situation. Additionally organisations can create journals for a particular purpose; like tracking a project or managing certain transactions such as particular customer payments.