The Genera

Notes

• Introduction to the General Journal The General Journal, also called the book of original entry or daybook, is the initial, chronological record of every financial transaction a business makes. Think of it as the first diary entry for each financial event in the company. • Key Purpose and Format The main purpose of the General Journal is to record raw transaction data in the order it occurs, ensuring an accurate audit trail and supporting the double-entry bookkeeping system. • Double-Entry System Every transaction must follow this rule: Total Debits always equal Total Credits. • Journal Entry Components A typical general journal entry includes these columns and details: • Date: The day the transaction occurred. • Account Titles and Explanation: Lists affected accounts, with the Debit account first (aligned to the left), followed by the Credit account indented below. A brief description or narration of the transaction follows. • Posting Reference (P.R.): Initially left blank; filled later when the entry is transferred (posted) to the General Ledger. • Debit Amount: The amount recorded in the debit column. • Credit Amount: The amount recorded in the credi...