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In addition to this information, a journal entry may include a short notation that describes
the transaction. There also may be a column for a reference number so that the
transaction can be tracked through the accounting system.
The above format shows the journal entry for a single transaction. Additional
transactions would be recorded in the same format directly below the first one, resulting
in a time-ordered record. The journal format provides the benefit that all of the
transactions are listed in chronological order, and all parts of each transaction are listed
together.
Because the journal is where the information from the source document first enters the
accounting system, it is known as the book of original entry.
For example, if an expense is incurred in which part of the expense is paid with cash
and the remainder placed in accounts payable, then two lines would be used for the
credit - one for the cash portion and one for the accounts payable portion. The total of
the two credits must be equal to the debit amount.
As many accounts as are necessary can be used in this manner, and multiple accounts
also can be used for the debit side if needed.
Special Journals
The general journal is the main journal for a wide range of transactions. Of these, a
business usually finds itself performing some types much more frequently than others.
By grouping specific types of transactions into their own special journal, the efficiency
and organization of the accounting system can be improved.
Some commonly-used special journals:
• sales journal
• purchases journal
• cash receipts journal
• cash disbursements journal
While a special journal may be organized differently from the general journal, it still
provides the core transaction information such as date, debits and credits, and the
relevant accounts.