General Journal

What is a General Journal

The general journal is a specialized journal for recording transactions such as start-up transactions, period-end adjustments, and correcting entries.

How it Works

In the days of manual accounting systems, you recorded a business’s transactions in a series of journals.

​You recorded a business’s day-to-day cash transactions in cash journals (for more, see cash payments journal, cash receipts journal)

Then you recorded day-to-day credit transactions in the credit journals (see sales distribution journal, purchases distribution journal)

​Finally,  there was the general journal.

​The general journal is still in use today.

It is the only area where you still need a knowledge of debits and credits.

You use the general journal to record things like business start-up entries.

To start a business, the business owner may use some of their own capital.

The business owner will put this money in the business’s bank account.

To record the transaction, you credit owners capital.

This shows money has come from the owners own capital.

Then you debit the checking account.

​This shows the money was deposited in the bank.

© R.J. Hickman 2020