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Chapter 7
4.7 The journal
In a bookkeeping system involving the use of 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 daybooks 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.
This book is called ‘the journal’ and is used for a wide variety of transactions, such
as:
the purchase and sale of non-current assets
depreciation
the write-off of irrecoverable debts
allowances for receivables
accruals and prepayments
transfers between accounts
the correction of errors.
Some of these entries have not yet been covered in this publication but will be fully
explained in later chapters.
The journal is therefore a clear and straightforward method of setting out an
accounting transaction by stating the double-entry required to record that transaction.
The journal is also used to correct errors in the accounting records. The correction of
errors will be considered later in this publication.
It is common for a computer-based assessment question to ask for the journal entries
for a transaction.
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