Unit 8 - Journal

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The journal is an accounting record where all business transactions are originally entered. It is a first recording of financial transactions as they occur in real time so that they can be used for future reconciliation and transfer to other official records, such as the general ledger. It usually state the date of the transaction, the accounts that were affected and the amounts recorded.

Examples of Journal Entries:

1.Rent of $2000 paid at the end of the month

Dr. Rent expense $2000

Cr. Cash $2000

2.Purchased furniture for $1500

Dr. Furniture $1500

Cr. Cash $1500

3. Advertising expense of $200 to be paid to newspaper at the end of the month

Dr. Advertising $200

Cr. Accounts payable $200

4.Purchased office supplies $300

Dr. Office supplies $300

Cr. Cash $300

5.Salaries of $1200 paid to workers

Dr. Salary $1200

Cr. Cash $1200

6. $1000 paid to a supplier for goods taken on credit

Dr. Accounts Payable $1000

Cr Cash $1000

7.Received $500 from customer for goods sold on credit

Dr. Cash $500

Cr. Accounts Receivable $500

8. Purchased $100 worth of goods

Dr. Purchases $100

Cr. Cash $100

9. Sold $300 worth of goods

Dr.Cash $300

Cr. Sales $300

10. Paid $50 for postage stamps

Dr. Stationery acc $50

Cr. Cash $50

Below are some of the most popular journals that a business would have.

Sales journal

The sales journal is a special journal that bookkeepers or accountants use to record sales of merchandise on accounts. It is used in accounting systems to keep track of sales of items that customers have purchased by charging receivables on debit side and crediting revenue on the credit side. A sales journal is usually used by companies and businesses to record sales on credit. It is very important to take note that only credit sales merchandise items are recorded in the sales journal.

Purchases journal

The purchases journal is used for recording credit purchases, such as merchandise for resale to customers, equipment, business supplies and other related purchases. It is actually a specialized type of accounting that keeps track of orders made by a company on credit. The details provided in the purchases journal is usually determined by the product received and the type of purchase made.

Sales return journal

When a business make sales to customers, it is possible that the customer may not like the product and will return the sold goods, maybe because of defects, substandard goods or because of any other reason. When a customer returns goods, that information is usually recorded in sales return journal and later transferred to the appropriate ledger account.

Purchases return journal

This is the type of account that is set up by businesses for the purpose of recording the return of goods that are returned by customers to supplier due to defects or any other reasons. Goods once purchased on credit may subsequently be returned to the seller. When a buyer returns goods to the supplier, the process is usually recorded in purchases returns journal.

NOTE: Cash sales and cash payments are recorded in the Cash Book.

Cash sale vs credit sale

Cash sales is when you purchase something with tangible money that you have with you at that particular moment. On the other hand, with a credit sale, you don’t need to have any tangible money right away, you are actually allowed to pay with a credit or debit card.

Cash purchase vs credit purchase

Cash purchase occurs why you buying a product from a seller using tangible money right away. On the other hand, credit purchases is where a buyer offers a credit card, which is a promise to pay by the credit card company, who then bills the card holder for the purchase made plus an interest rate.


The following transactions occurred on January 5th, 2015 in 3 stores at a Mall:

1. XYZ bakery purchases an oven for $200

2. Anne, a florist, sells 3 vases for $300

3. Mr.Brown purchased $400 in stationery to be used in the office

4. Anne purchases $400 of flowers on credit to be paid at the end of the month.

5. Anne pays entire debt for flowers purchased at the start of the month

6. XYZ bakery sold 3 cakes at $100 each

7. Mr. Brown paid salaries of $500

8. A customer returns a defective $200 alarm system to Mr Brown’s store.

9. Mr.Brown purchased a new computer for the office costing $200

10. The bakery paid rent of $200 at the end of the month

11. Bakery took a loan of $500

12. Anne returns an incorrect order of $200 worth of flowers to a supplier.

Prepare the double entry, then post for each store the relevant transactions to the Sales Journal, Purchases Journal, Sales Return Journal and Purchases Return Journal. Omit the credit note/debit note/invoice/purchase order numbers. Send your answer to: actira.tt@gmail.com