What is a general journal? State six uses of the general journal

What is a general journal?

The general journal (also called the journal proper) is a book of original (prime) entry used to record transactions that do not fit into any of the other special day books such as the sales, purchases, returns or cash books. Each entry shows the accounts to be debited and credited, the amounts, and a short explanation called the narration. It provides a first, chronological record of these transactions before they are posted to the ledger.

Six uses of the general journal

1. To record opening entries when a new set of books is started, listing assets, liabilities and capital.
2. To record the purchase and sale of fixed assets on credit (for example, buying machinery on credit).
3. To record the correction of errors in the ledger.
4. To record adjusting and transfer entries at the year end (for example, depreciation, accruals, prepayments, provisions).
5. To record closing entries that transfer balances to the trading and profit and loss accounts.
6. To record other unusual or non-recurring transactions such as bad debts written off, inter-account transfers, and the writing off of goodwill.