Journal Entries Format and Examples


What is General Journal?

Journal entries are used to record business transaction and the first step in accounting cycle. This process continues throughout the accounting period. In order to record journal entries in general journal, bookkeepers need to find out the debit credit effects involved in business transactions. For example, company purchases furniture on cash. This event has two effects the cash account is credited or decreased and the office furniture account is debited or increased.

While making journal entry there are three steps to follow.

First bookkeepers must identify business transaction. When and what types of transaction incurred. Then in order to analyze transaction, we need to find whether the business transaction have any economic impact on assets, liabilities and owner equity. After identified and analyzed transaction, it is the time to journalize transaction using debit credit rules on transaction having economic impact.

General entry has its standard format based on accounting equation which contains specific columns for date, description, post reference, debit amount and credit amount.

The process or art of recording transactions in general journal is called journalizing. It is sometimes also called making an entry.

The maintenance of General journal becomes imperative for all business concerns. Having this book in place, the achievement of other desired objectives and goal with respect to accounting systems and internal controls become more certain. This may further be noted that in large business units, there are several journal books are used for specific purposes. These journals include, but not limited to, sales journal, purchase journal, cash journal etc. This sub-division of General journal is usually based on the needs of business and volume of activities. In order to understand the accounting and book keeping, at this stage, student should focus and concentrate only on single journal system.

Format of Journal Entry

The standard form of General Journal can be presented as under.

Journal Format


In order to understand and comprehend the process of recording entries into general journal, students are advised to look into the following example:

In a business unit, the following journal entries transactions took place in the month of April, 2016.

April 02 – Mr. Titus started business with cash $ 20,000

Journal Entry Example

April 03 – Purchased merchandise for cash $ 450

journal Entry Format

April 4 – Purchased merchandise on account for $ 250.

purchase journal example

April 07 – Sold merchandise for cash $ 200.

sales journal entry

April 15 – Sold merchandise on account for $ 350.

sale journal entry example

April 19 – Paid cash $ 100 against credit purchases

journal entry example

April 30 – Paid salaries for month $ 600

Journal Entries Example 7

This was the first step of accounting cycle, journal entries were posted. In the next step we will record it in ledger accounts.