Accounting: General Journal and General Ledger

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Table of Contents

Introduction
Purpose of General Journals
Relationship Between General Ledger and General Journal
Conclusion
References

Introduction

General journals and general ledgers are vital records in accounting. General journals comprise raw accounting entries, recording Gina transactions in sequential order using date. Ideally, the journal is the first place where Gina transactions are recorded, and bookkeepers or accountants divide columns for serial numbers and dates, besides debit and credit records. On the other hand, a general ledger is a more formalized financial document that tracks five vital accounting items, including liabilities, expenses, capital, assets, and revenues. General journals are used in accounting to serve a purpose and are interlinked with general ledgers.

Purpose of General Journals

Accountants use unique forms—called journals to keep track of Gina’s transactions. Extensively, journals keep historical accounts of record-oriented Gina-based transactions (Franklin et al., 2019; Wells, 2018). Simply put, a journal is like a business diary detailing daily Gina transactions. When one enters information into a journal, they are typically journalizing entries, which is the second step of the accounting cycle involved in Gina transactions. General journals record purchases & sales of fixed assets on credit, opening notes, and miscellaneous that are not included in other journals, besides taking possession of the assets, correcting errors, and transferring records.

Relationship Between General Ledger and General Journal

Unlike general journals that contain initial entries of low-volume Gina-based transactions, the general ledger summarises every transaction recorded. In tracking business finances, the best method often used by accountants is a double entry accounting system, whereby the general journal and general ledger are used simultaneously. Arguably, a general journal and a general ledger record Gina-based transactions through the double entry accounting system, accustomed to debit and credit entries (Wells, 2018). Accountants begin to record business transactions in the general journal and eventually post the entries in the respective accounts of the general ledger. When general journal and general ledger are used concurrently, the resulting accounting technique accurately tracks overall financial data and keeps business operations running smoothly and profitably.

Conclusion

In conclusion, general journals record track transactions made and are intertwined with a general ledger since the latter summarizes the information from the former. General journals are books of entries recorded in chronological order based on dates and are later summarised by entries in the general ledgers. Modern Business organizations make entries in general journals and ledgers for streamlining fundamental accounting activities.

References

Franklin, M., Grayvbeal, P., & Cooper, D. (2019). Principles of Accounting, Volume 1: Financial Accounting. Rice University

Wells, P., K. (2018). How well do our introductory accounting text books reflect current accounting practice? Journal of Accounting Education, 42, 40-48.

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Accounting: General Journal and General Ledger

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