Accounting

The Bookkeeping Journal format

 

Before any transaction in registered in the two ledger accounts that accompany it, they are first registered in a table of rows, called a journal.

Every row in the journal is designated for registering the data from some transaction.

After being registered in the journal, the data are automatically transferred to the two corresponding ledger accounts.

Registration in the journal is in chronological order, according to the date on which the transaction documents were received.

Example:

The following events occurred in May 2008 at the USA Chairs company:

  1. On May 1, the company bought 100 kg of wood for $2,000 from the Africa Wood supplier. The number of the invoice received was 9270.
  2. On May 2, the company received an invoice from the IEC for $800 in respect of electricity consumption in March-April 2008. The invoice number was 23811.
  3. On May 5, the company sold 20 chairs to the Coffee and Pastry customer for $1,000. The number of the invoice issued was 122.
  4. On May 9, the company paid Lisa James $2,000 in wages through check no. 123456.

Registration of these events in the journal is as indicated below:

Serial No.

Date

Debit Account

(Receiving Ledger Account)

Credit Account
(Giving Ledger Account)

Reference No.

Particulars of the Transaction

Sum

(1)

(2)

(3)

(4)

(5)

(6)

(7)

1

May 1

Purchase of raw materials

Africa Wood (supplier)

9270

100 kg wood

$2,000

2

May 2

Electricity expenditures

IEC (supplier)

23811

Electricity consumption
3-4/08

$800

3

May 5

Coffee and Pastry (customer)

Sales

122

Sale of 20 chairs

$1,000

4

May 9

Lisa James

Current account

123456

Salary for Lisa James

$2,000

Every row in the journal is automatically transferred to the two ledger accounts listed in Columns (3) and (4) above, as follows:

For the sake of simplicity, assume that the balance of each of the ledger accounts in the following examples, before the additions, is 0.

  1. The First Row in the Journal:

Raw Materials Purchase Ledger Account

Particulars

Debit

Credit

Balance

Date

Reference

Contra Account

Particulars of Transaction

May 1

9270

Africa Wood (supplier)

100 kg of wood

$2,000

$2,000 D

Africa Wood Ledger Account (Supplier)

Particulars

Debit

Credit

Balance

Date

Reference

Contra Account

Particulars of Transaction

May 1

9270

Purchases of Raw Materials

100 kg of wood

$2,000

$2,000

  1. The Second Row in the Journal:

Electricity Expenditures Ledger Account

Particulars

Debit

Credit

Balance

Date

Reference

Contra Account

Particulars of Transaction

May 2

23811

IEC (supplier)

Electricity consumption Mar.-Apr./08

$800

$800 D

IEC Ledger Account (Supplier)

Particulars

Debit

Credit

Balance

Date

Reference

Contra Account

Particulars of Transaction

May 2

23811

Electricity Expenditures

Electricity consumption Mar.-Apr./08

$800

$800

  1. The Third Row in the Journal

Coffee and Pastry Ledger Account (Customer)

Particulars

Debit

Credit

Balance

Date

Reference

Contra Account

Particulars of Transaction

May 5

122

Sales

Sale of 20 chairs

$1,000

$1,000 D

Sales Ledger Account

Particulars

Debit

Credit

Balance

Date

Reference

Contra Account

Particulars of Transaction

May 5

122

Coffee and Pastry (customer)

Sale of 20 chairs

$1,000

$1,000

  1. The Fourth Row in the Journal

Lisa James (Employee) Ledger Account

Particulars

Debit

Credit

Balance

Date

Reference

Contra Account

Particulars of Transaction

May 9

123456

Current Account

Salary

$2,000

$2,000 D

Current Account Ledger Account

Particulars

Debit

Credit

Balance

Date

Reference

Contra Account

Particulars of Transaction

May 9

123456

Lisa James

Salary

$2,000

$2,000

The Bookkeeping Journal format544The Bookkeeping Journal format