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Ledger accounting and double-entry bookkeeping

3.6 The journal

In a bookkeeping system using the books of prime entry, it is inevitable that there will
be transactions that do not correspond with the main books of prime entry used, that
is, the day books and cash books. In order to complete the system, another book is
needed in which to capture sundry items prior to entering them in the ledger
accounts.

This book is called ‘the journal’ and is used to record a wide variety of transactions,
such as:

 the purchase and sale of non-current assets

 recording the annual depreciation charge

 the write-off of irrecoverable debts

 allowances for receivables

 accruals and prepayments

 transfers between accounts

 the correction of errors.

Every journal entry should have an equal value of debits and credits to post into the
general ledger

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