In financial accounting, journal is a record of all the transactions of a business which occur with in a specific time period. The business transactions are recorded chronologically in a journal each one with a short description. A record of a single transaction in a journal is called journal entry.
There are two types of accounting journals:
General Journal can be used to record any type of financial transaction. If a business is involved in relatively small number of transactions each day, it can cover all of them in just a single accounting journal with out any complexity.
Specialized Journals are used by larger businesses which are involved in numerous transactions each day. Recording all those transactions in just a single journal will make things too complex. Therefore all the transactions of sales are recorded in sales journal, those of purchases are recorded in purchases journal and receipts and payments of cash are recorded in cash journal etc.
Thus there are following important specialized journals:
- Cash Journal
- Sales Journal
- Purchases Journal
Written by Irfanullah Jan