Double Entry BookkeepingGeneral Journal in AccountingThe general journal sometimes referred

to as the nominal journal, is a journal used to record transactions which do not belong in any of the
other special journals such as the sales, purchases, cash receipts, and cash disbursement journals.
The general journal is simply a list of journal entries in chronological order, and is used to save
time, avoid cluttering the general ledger with too much detail, and to allow for segregation of
duties.General Journal EntriesThe general journal is a book of prime entry and therefore the
entries in the journal are not part of the double entry posting. Typically, the general journal entries
record transactions such as the following:Opening entriesAdjusting entriesCorrecting
entriesAccounting period end closing entriesAllowance for doubtful accountsFixed asset
purchases and salesDepreciation adjustmentsGoods taken for personal useTransfer between
subsidiary ledger personal accountsThe information recorded in the journal is used to make
postings to the relevant accounts in the general ledger.Information Listed in the General
JournalThe information in the journal entry is taken from the relevant source documents, and each
entry includes the following:Transaction dateDebit: Account title, general/subsidiary ledger
reference, and amountCredit: Account title, general/subsidiary ledger reference, and
amountReason for the journal entrygeneral journal in accountingThe general/subsidiary ledger
reference refers to the relevant account numbers in those ledgers. In certain instances (see below)
an entry may need posting in both the subsidiary ledger and the general ledger and therefore a
reference needs to included for both ledgers.Journal Accounting Entry ExamplesThe use of the
journal accounting is a three step process.Information is recorded in the general journal from the
appropriate source documentsThe journal line items are used to update the subsidiary ledgers (if
appropriate)The posting line items are used to update the general ledgerIt should be noted that, if
the business maintains subsidiary ledger control accounts in the general ledger, then only step 3
above is part of the double entry bookkeeping posting.1. General Journal is Updated from Source
DocumentationEach transaction is entered into the general journal giving the information listed
above. Typical general ledger journal entries would be shown as follows (some information has
been omitted to simplify the example) :Date: Nov 07 Account Debit CreditPurchases 90
Accounts payable 90Total 90 90Reason: To correct purchase of goods from
supplier ABC entered as 300 instead of 390Date: Nov 30 Account Debit
CreditDepreciation expense 800 Accumulated depreciation 800Total 800
800Reason: To provide for depreciation of equipment for the month of November.Date: Nov
30 Account Debit CreditAccounts payable control 550 Accounts receivable control
550Total 550 550Reason: To transfer a balance on accounts payable ledger to accounts
receivable ledger.Date: Nov 30 Account Debit CreditBad debt expense 600 Allowance
for doubtful accounts 600Total 600 600Reason: To allow for doubtful accounts at the
month end.2. General Journal Used to Update the Subsidiary LedgersOn a regular (e.g. daily)
basis, the line items in the journal are used to update the subsidiary ledgers as necessary. In the
above example, the first general ledger entry is a correction of an error which involves the
accounts payable ledger (a subsidiary ledger). Consequently the credit side of this entry needs to
be entered in the account of supplier ABC in the accounts payable ledger. Furthermore as the
business maintains control accounts in the general ledger, this entry is not part of the double entry
posting which is dealt with by step 3 below.In contrast the other two items do not involve a
subsidiary ledger and an entry it not required.3. General Journal to General LedgerSubsequently,
on a regular basis, each of the journals listed in the general journal is used to update the relevant
accounts in the general ledger. As the business uses control accounts, all of these entries to the
general ledger are part of the double entry bookkeeping posting.Accounting Journal TemplateOur
accounting nominal journal template will help a business to document and post journal entries in a
consistent, standard format setting out the required information listed above.Last modified
September 27th, 2022 by Michael BrownAbout the AuthorChartered accountant Michael Brown is
the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and
consultant for more than 25 years in all types of