Accounting Journals

Previous lesson: Basic Accounting Journal Entries 
Next lesson: T Accounts

It is common for a bookkeeper to keep seven different accounting journals (i.e. seven books of first entry). Each journal covers a different aspect of the business.

The basic format for each of these journals is the debit and credit as listed previously. There is, however, a more exact format of each journal, and this is shown below... 

Cash Receipts Journal (CRJ)

The cash receipts journal is the journal where you record all cash that has been received.

The format of the cash receipts journal is as follows: 

Cash Receipts Journal

Major categories of receipts, such as from income or from debtors, receive their own column.

The category called sundry is used to represent various miscellaneous (and less regular) items, such as capital or receiving cash from a loan. The word sundry actually means "various," "miscellaneous" or "general."

The "bank" column is added up to show the total cash received for the period concerned.

Cash Payments Journal (CPJ)

The cash payments journal is the opposite of the cash receipts journal. It is the journal where you record all transactions where cash has been paid out. 

Cash Payments Journal

Once again the "bank" column is added up to show the total payments. The totals of the other three columns show how much was paid to what. "Expenses" and "creditors" would be the major categories towards which payments would be made.

Bear in mind that the cash receipts journal and cash payments journal can be replaced by the cash book, which is simply a combination journal showing all receipts and all payments together.

The total of the cash book (and of the cash on hand) for George’s Catering after all the transactions would come to $14,800, which is the same as the total of the cash receipts journal ($35,500) minus the total of the cash payments journal ($20,700).

Additionally, petty cash, which is simply a sum of cash on hand kept to pay small expenses, can also have its own separate journals (similar to the above, comprising the petty cash receipts journal and petty cash payments journal). Petty cash is also often accounted for in a separate journal combining receipts and payments, called the petty cash book.

Sales Journal (SJ)

The sales journal is where all sales on credit are recorded (or in this case "services rendered" on credit).

The format of the journal is as follows:

Sales Journal

Note that only the income on credit is recorded here. When the Smiths finally pay George’s Catering, this is recorded in the cash receipts journal. 

Sales Returns Journal (SRJ)

This journal is used specifically for transactions where goods that were originally sold have now been returned. It would not really apply to a service business such as George’s Catering, but rather to a trading or manufacturing business that has products returned to them. (A trading business buys goods at a low price and sells them at a higher price. A manufacturing business makes products using materials and then sells the finished products. George's Catering is a service business.)

The format of this journal is: 

Sales Returns Journal

Purchases Journal (PJ)

The purchases journal is used to record all purchases of inventory on credit. (Inventory are stock or goods. See the lesson entitled What is Inventory? for more information.)

The purchases journal does not apply to just any assets – only to inventory.

Also, note that the purchases journal applies only to a trading or manufacturing business that purchases inventory on credit.

Purchases Journal

Purchases Returns Journal (PRJ)

The purchases returns journal shows all returns of inventory that were originally purchased on credit (by your business). It is likewise only applicable to trading and manufacturing businesses

Purchases Returns Journal

General Journal (GJ)

The general journal shows all journal entries for anything not recorded in any of the journals above, such as adjustments of accounts.

This journal has the simple format that we saw earlier: 

General Journal

Depending on the syllabus of the course you are doing, the formats of the above accounting journals may or may not be absolutely crucial. In any case they simply follow the debits and credits format that we have been getting used to up to now, so it isn't rocket science.

If the journals appear slightly differently in your accounting textbook than in these materials, then follow the format in your textbook (the accounting journals above have been shown in their simplest forms so they're easier to grasp). The format in your accounting textbook is what you will be examined on anyway, right?

Let’s go to the next step of the accounting cycle.

Return to The Accounting Cycle 

Return to the Home Page 

Previous lesson: Basic Accounting Journal Entries 
Next lesson: T Accounts

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Questions Relating to This Lesson

Click below to see questions and exercises on this same topic from other visitors to this page... (if there is no published solution to the question/exercise, then try and solve it yourself)

Purchase Returns & Discounts Question 
Q: If I bought 3 units of merchandise on account and returned 1 due to defects, and was given a credit memo, what would the entry be? Debit: Credit …

Journal Entries 
Q: Write the journal entries for the following transactions: Jan 1 Shayam commenced with cash 15,000. Jan 10 Returned goods to Krishna 350. …

Settlement Discount Granted 
Q: How does a settlement discount granted affect the debtors column on the cash receipts journal? A: Just to clarify for anyone reading, a settlement …

Capital Entry
Cash Receipts Journal
Q: Which accounts are affected and what is the entry for the following: June 1: The owner invested an additional capital of $20,000 in the business …

Journal for Partial Payment and Trade-In of Vehicle
incl. Depreciation
Q: Paid $12,500 for a car which cost $20,000 with the garage accepting $7,500 in part exchange. The old car cost $22,000 and had depreciated by $5,000. …

What is the Cash Book? 
Q: What is the cash book? A: Great question. The cash book is actually a combination of the cash receipts journal (CRJ) and the cash payments journal …


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