Small Business Guide

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Small Business Guide

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General Journal

The general journal is usually a two-column journal used for unusual and annual accounting entries that aren't recorded in the sales and cash receipts and cash disbursements journals. Adjusting entries and closing entries, made at the end of an accounting period, are the most common entries made in the general journal. The general journal is also used to record special transactions that don't get recorded in one of the regular journals.

Example

As an example of a "special transaction," on April 12, 2004, $7,500 was spent on new production equipment in your machine shop. At that time, the amount was incorrectly expensed to repairs and maintenance in the cash disbursements journal. It should have been recorded as a purchase of fixed assets. Upon discovery of the error, you make the following correcting entry in your general journal.


Debit Credit
Equipment 7,500
Repairs and maintenance
7,500
To correct 4/12/2004 purchases journal entry

General journal entries are posted to the respective general ledger accounts.

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