Question 3

• General Journal


  A primary record-keeping tool used to record transactions that do not fit into specialized journals such as Sales Journal or Purchases Journal
• Purpose of the General Journal


  • Used to record transactions that are unique, infrequent, or non-routine, as well as adjustments and corrections to other accounts
  • Ensures that all financial transactions are accurately recorded in the accounting system
• Format of the General Journal entry

  1. Date

  2. Account Titles (at least two accounts: one debited and one credited)

  3. Debit Amount

  4. Credit Amount
• Double-Entry System


  Every transaction affects at least two accounts with equal debits and credits, ensuring the accounting equation (Assets = Liabilities + Equity) remains balanced
• Recording Process

  1. Transactions are initially recorded in the General Journal

  2. Details are then transferred ("posted") to the appropriate ledger accounts
• Types of Transactions recorded in the General Journal

  • Adjusting entries (e.g., depreciation, accruals, prepayments)
  • Correcting entries
  • Non-routine sales or purchases
  • Any other transactions not covered by specialized journals
• Importance of the General Journal

  • Provides a detailed audit trail of financial transactions
  • Supports financial reporting, decision-making, and compliance with accounting standards and regulations