General Journal in Accounting How to Prepare Journal Entries?

what kinds of transactions can be entered in a general journal? This is a topic that many people are looking for. is a channel providing useful information about learning, life, digital marketing and online courses …. it will help you have an overview and solid multi-faceted knowledge . Today, would like to introduce to you General Journal in Accounting How to Prepare Journal Entries?. Following along are instructions in the video below:

“Everyone hi. I welcome you all of nyou to the channel of wallstreetmojo watch. The the video till the end and if nyou re new to this channel. Then you subscribe us by clicking the bell icon ntoday.

We have a topic with us is general journal. Okay as a name itself the njournal. The general journal is an initial or it s called the journal nentries let s make this simple. The journal entries is an initial nrecord keeping.

Which records. All the transaction. Except for the ones. Which nare recorded a specific a specialty journal like you know cash journal.

We nhave purchase journal. So whenever any event occurs or a transaction happen it nis recorded in a journal and journal can be divided into two types speciality njournal and general journal. These are the two types so a speciality journal nrecords. All these sort of i can call the special events transaction.

That are nrelated to that particular journalist and there are mainly four kind of nspeciality journal. One is called the sales. Another is called the cash nreceipts. Okay.

Then there is a thing called npurchase general cash disbursement journal forget..

There s are the four ntypes. But the company can have more speciality journal depending on its nneeds and the type of the transaction. But the above over here for that have nbeen mentioned. Contains the bulk of the accounting activities and all of the ntransaction.

Which are not entered into this facility journals are accounted in nthe general journal. So this can have the following types of transaction. Like naccount receivables accounts. Payables with this is known as your debtors this nis your creditors.

Then we have a thing called equipment we nhave the accumulated depreciation. We have expenses interest income. It also nincludes expenses. Okay now we ll try and discuss the journal general journal naccounting part ok the double entry bookkeeping is the most common method of let me just write double entry nbookkeeping system is the most common method of general journal.

Accounting. No nthis is the most common method of accounting every business is done by nexchange between you know the transaction is done by exchange between ntwo accounts. So there are equal. What we call as opposite accounts for all the ntransaction namely the there can be credit and debits both are possible nhence when a transaction is recorded in a journal.

It debits one account and it ncredits another one okay so for example. Let s say for company. Let s say it npurchases of 5000 of inventory now using the cash and inventory in the njournal would be made where by cash account is decreased the cash account is ndecreased let s say by 5000 and the inventory up will be increased by n5000 years. Okay now i will provide you with the format part of the njournal with the general journal format.

It provides the chronological order of nall non specialized at consists of 4 or closely..

5. Columns now the first none starts with date of transaction then there is a short description they also ngoes with mem then there is debit amount then there is a credit amount post facto nthere is a reference number and the referencing to the journal ledger is a nvery easy indicator okay remember that now let s take an example over here nlet s look at few examples. Let s say you purchase an asset in that asset you npurchase that asset by cash and let s say that is machinery and you purchased nit by cash. So machinery account is debited cash account is credited to the nextent of let s say you purchased the machinery for.

100000. So this nwill be debited because machine is coming in in your company. Cash you have npaying and that is going out so it will be credited debit what comes in credit nwhat goes out now let s say you incur some expenses. Let s say selling and ndistribution expenses that you do expense debit and income credit let s nsay you are doing this expense by cash and it is 5000.

So 5000 debit over here and 5000 cash is going on credit let s nsay now take up and foreign income. Let s say you are receiving an income so cash nis coming. In and the income is the interest income so interest income naccount credit because debit. The expense credit the income.

I ll take the same namount here we took one of asset now let s take one of liability. Let s say nyou purchase that same machinery. But not with cash. But with the help of or nliability.

Let s say you you purchased on credit. So creditors will open up let. s nsay you purchase from glen smith. And come and that was of.


So the nabove entry now converts to instead of cash. There s a liability. That is nstanding. So there are a couple of examples that you need you need to nunderstand so that you know you have a great idea about exactly what s going on nnow.

The flow of the process of the journal entries. Now let s look at the nflow of the process of journal entries. Before and after it is recorded in the njournal accounting. Now before an entry is made in journal entries they make nmaker has to decide you know accounts.

Which will be affected by the ntransaction and second which accounts to debit and which to credit. Now after nthese entries are properly made in the journal in the accounting. All this ntransaction is summarized right and it is posted in ledger. Now a ledge over nhere is an account of the final end.

Which is a master account. It is the nmaster account that summarizes the transaction in the company and it has nindividual accounts that records your assets your liabilities nequity your equity than your revenues you have expenses gains and nlosses now some example of accounts are in the ledger our account receivables naccounts payable. So this is a your asset. This is your liability.

Then you have nyour retained earnings. Which is your equity liability could you account then nlet s say you do product sales. So that goes with your revenue. Just taking one none example of all let s say cost of goods sold so that goes as expense nso to summarize every accounting transaction is stored in a journal which nacts as an intermediary repository of the information.

Which is then recorded nin..

The general journal ledger. So the ledger in turn is used to aggregate this ninformation into the financial statement of a business. Which are called as the ninitial trial balance okay. So let me make my final conclusion on this.

The ngeneral journal is initial record keeping. Which records. All the ntransactions except for the ones. Which are recorded in this specialty journal.

Nlike cash purchase journal and it states that the date of the transaction. The ndescription credit debit information in the double bookkeeping system and the njournal entries are then used to form a ledger and the information is ntransferred into the respective accounts of the ledger of the ledgers are then nused to make trial balance and finally the financial statements. However. These njournals were more visible in the manual keeping record keeping days.

So with the nadvent of the technology. The task of record keeping has been made very easy nwith all the information being stored in a single repository with no speciality njournals in use so that s it for this particular ntopic. If you have learned and you know liked the video. If you think that you nknow.

If you have enjoyed and learned watching this video. Please like comment non this video and subscribe to our channel for all the latest updates. Thank nyou everyone. ” .


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