Journal
What is the journal?
The journal is a book of prime entry. It takes anything that fits in neither a day book nor the cash book.
A journal entry names the accounts to debit and the accounts to credit. Total debits must equal total credits.
It ends with a narrative: a short note that says what the entry is for.
The journal is not an account. The entry still has to be posted to the ledger.
Example
A café buys a coffee machine for £750.00 on credit. The journal entry debits Equipment with £750.00 and credits the supplier with £750.00. The narrative names the invoice.
Why it matters
It is used for the opening entries of a new business, writing off a debt, correcting an error and one-off transactions. The narrative keeps the reason for each one.
Practise it
Ledger Drill is practice, not tax or accounting advice. If this looks wrong, tell us at [email protected].