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Accounting: General Journal vs General Ledger
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Accounting: General Journal vs General Ledger

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Questions and Answers

What is the purpose of the General Journal?

  • To provide a reconciled balance of accounts
  • To record cash payments for payables and expenses
  • To track all sales transactions in a company
  • To keep track of all financial transactions by date (correct)
  • What type of transactions are recorded in the Cash Receipt Journal?

  • Cash payments for expenses and payables
  • Client collections, interest payments, and cash sales (correct)
  • Asset sales only
  • Liability payments only
  • Which book provides a reconciled balance by summarizing an account's journal entries?

  • General Ledger (correct)
  • Sales Journal
  • General Journal
  • Cash Disbursement Journal
  • What is the purpose of the Cash Disbursement Journal?

    <p>To record cash outflows in businesses</p> Signup and view all the answers

    Which type of journal is used to track a company's sales transactions?

    <p>Sales Journal</p> Signup and view all the answers

    What does the General Ledger result from?

    <p>Combination of Special Journals and General Journals</p> Signup and view all the answers

    What is the purpose of the Cash Receipt Journal?

    <p>Record cash inflows from payables and expenses</p> Signup and view all the answers

    Which journal is used to record cash outflows in businesses?

    <p>Cash Disbursement Journal</p> Signup and view all the answers

    What does the Sales Journal primarily track?

    <p>Company's sales transactions</p> Signup and view all the answers

    Which book is the final record of entries that provides a reconciled balance?

    <p>General Ledger</p> Signup and view all the answers

    What type of transactions are recorded in the General Journal?

    <p>Real-time financial operations by date</p> Signup and view all the answers

    Which book is the result of combining Special Journals and General Journals?

    <p>'Book of Record'</p> Signup and view all the answers

    What is the primary purpose of the General Ledger?

    <p>Provide a reconciled balance by summarizing journal entries</p> Signup and view all the answers

    What distinguishes the Cash Receipt Journal from the Cash Disbursement Journal?

    <p>'Cash Receipt Journal tracks cash received; Cash Disbursement Journal tracks cash paid'</p> Signup and view all the answers

    Which journal records transactions involving collection from customers?

    <p>Sales Journal</p> Signup and view all the answers

    What does the General Journal follow in recording financial transactions?

    <p>Real-time transactions by date</p> Signup and view all the answers

    Study Notes

    Types of Journals

    • General Journal, also known as the Book of Original Entry, records all financial transactions by date and is used to track real-time transactions.
    • It follows the general debit and credit principle and is the first book to document business transactions.

    General Ledger

    • The General Ledger, also known as the final book of entries, provides a reconciled balance by summarizing an account's journal entries.
    • It tracks resources, liabilities, incomes, costs, and company salaries.
    • It is the result of Special Journals and General Journals combined.

    Cash Receipt Journal

    • Cash Receipt Journal records all cash payments made to cover expenses and collect receivables.
    • Examples of cash receipt entries include asset sales, cash sales, client collections, interest payments, and rent payments.

    Cash Disbursement Journal

    • Cash Disbursement Journal records cash outflows in businesses, including cash payments for payables and expenses.
    • It helps update the general ledger and provides professionals with an understanding of the company's payment status.

    Sales Journal

    • Sales Journal is used to record all sales made by a company, including goods and other products.
    • It is a specific type of journal used to keep track of a company's sales.

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    Description

    Learn the key differences between the General Journal and General Ledger in accounting. Understand the purposes and functions of each book in tracking financial transactions and summarizing account balances.

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