Accounting - Journal Entries

Journals in Accounting

• A journal is the first book where business transactions are recorded, and each record is called an entry.
• It is like a diary of transactions, where accounting records are made before they are posted to the ledger.

Types of Journals

• Purchases journal or Purchases day book or Purchase Book
• Sales journal or Sales day book or Sales Book
• Purchases returns journal or Purchases Returns Book or Purchases returns day book or returns outwards journal
• Sales returns journal or returns inwards journal or Sales returns book or sales returns day book
• General Journal, Principal Journal or Journal proper

Uses of Journals

• Purchases book: to record goods bought on credit only.
• Sales book: to record goods sold on credit only.
• Purchases returns book: to record goods returned by us to the seller (e.g., damaged or bad quality goods).
• Sales returns book: to record goods returned by our customers to us.
• General journal: to record various transactions, such as:
  • All transactions on a day-by-day basis to avoid omissions or forgetfulness.
  • Transactions that do not take place often.
  • Correcting mistakes in accounts records.

Example of Sales Journal

• Date: December 5, 2004
• Particulars: Sold goods on credit, 20 cartons of key soap at N10 per carton to Mr. Jibunor
• Amount: N200
• Date: December 19, 2004
• Particulars: Sold goods on credit, 30 pairs of slippers at N4 per pair to Ngozi Adebayo
• Amount: N120

Example of Sales Returns Journal

• Date: December 7, 2004
• Particulars: Mr. Jibunor returned 5 cartons of soap as inferior
• Amount: N50
• Date: December 22, 2004
• Particulars: Ngozi Adebayo returned 10 pairs of slippers as bad
• Amount: N40

This quiz tests your understanding of journal entries in accounting. Learn about the importance of journals in recording business transactions and how they are used to post entries to the ledger.