The Transaction Journal (Transaction Analysis Evolves)

So far you have learnt through transaction analysis tables the complexity of each transaction. To understand entirely makes data entry simplistic in nature with less chance of error. Transaction analysis tables are a learning model, they are not an accountancy method. The method to record your daily transactions is through the use of a journal. The journal is the first point of call for all business transactions.

The journal contains information about each transaction as follows:

• Date of transaction,
• Accounts to be posted (including folio),
• Amounts to be posted to each account,
• Whether the account is debited or credited, and
• A description of the entry, detailing source documents and other details necessary.

Your journal would now take the following form instead of the previous transaction analysis form. Journal entries are your instruction and authorisation for ledger postings.

Download general journal in PDF format:

Rules to note over the journal are:

• Debit entries are performed before credit entries,
• Debit equals credit (double entry rule),
• A narration for each transaction is contained outlining the specifics,
• A line is drawn between each journal entry, and
• A blank line is left between each entry.

The journal becomes your chronological record of transactions as they occur within your business. Software accounting through MYOB works vastly different to the manual system and will be explained in advanced tutorials surrounding the use of MYOB.

Specialised Journals

Whilst we mention that all transactions can be entered to a general journal, a more realistic business model utilises a number of different, or specialised, journals in day-to-day business. These journals include, though not limited to:

• Cash receipts journal,
• Cash payments journal,
• Sales journal, and
• Purchases journal.