THE JOURNALS

– Sales journal
– Purchases journal
– Sales return journal
– Purchases return
journal
– General journal
 The Journal:
The Original Book of Entry OR Day
Book
– Books of original entry refers to the accounting journals in which
business transactions are initially recorded.
– The information in these books is then summarized and posted
into a general ledger.
– Each accounting journal contains detailed records for the types of
accounting transactions pertaining to a specific area. Examples of
these accounting journals are:
• Purchase journal
• Sales journal
Transaction Type Source Original
Documents Books of
Entry
Cash receipts and payments Receipts Cash Book
Credit sales Invoice Sales Day
Book / Sales
Journal
Credit purchases Invoice Purchases Day
Book / Sales
Journal
Returns of goods by customer to us Credit note Sales Return
(sales return/return inwards) Day Book /
Sales Return
Journal
Returns of goods by us to supplier Credit note Purchases
(purchases return/return outwards) Return Day
Book /
Purchases
Return Journal
Other transactions General
 Types of
Journals

Special General
Journals Journal

Purchases
Sales journal
journal

Sales return Purchases

journal return journal
SALES
JOURNAL
(SALES DAY
BOOK)
An example of the sales day book

Sales Journal
Date Details Invoice/Credit Note No. Amount (RM)
Sales Journal – a book of original entry used by the book keeper to
enter all debtors (trade receivables) of stock (inventory) once a credit
customer has been sent an invoice
Example 1
Posting credit sales
Example 2
Posting credit sales
From the sales day
book:

All credit sales are

posted individually to
the debit side of each
customer’s account in
the sales ledger.

The total of the credit

sales is posted to the
credit of the sales
account in the general
ledger.
PURCHASE
JOURNAL
(PURCHASE
DAY BOOK)
Purchases Journal - a
book of original
entry used to enter
all creditors (trade
payables) of stock
(inventory) once the
firm has received an
invoice from the
creditor (supplier).
SALES
RETURN
JOURNAL
(SALES
RETURN
DAY BOOK)
Sales Return Journal - a book of original entry used to enter all returns back
into the firm by debtors (trade receivables) of stock (inventory).
Usually there will be a reason why goods have been returned on the debit
note sent by the customer (the goods ordered were sent incorrectly or were
faulty (broken)).
This will be deducted from the amount owing in the monthly statement.

Sales Return Journal

Date Details Invoice/Credit Note No. Amount (RM)
PURCHASE
RETURN
JOURNAL
(PURCHASE
RETURN DAY
BOOK)
Purchases Return Journal- a book of original entry used to enter all returns
back out of the firm to creditors (trade payables) of stock (inventory).
Usually there will be a reason why goods have been returned on the debit
note sent to the seller (the goods ordered were sent incorrectly or were
faulty (broken)).
This will be deducted from the amount owing in the monthly statement.
THE
GENERAL
JOURNAL
 The General Journal
• A book that is used by book keeper to record the
transactions that do not fit into any other day
book.
• Chronological record of the transactions
• Year is entered at the top of each page
• The month is only entered for the first entry on a
page unless the month changes in the middle of
the page. The month may be shortened.
• Enter numerical date for each transaction, even if
there are many entries on same date
 Journalizing Transactions
• Identify each account affected and its type
• Determine whether each account is increased or
decreased (use the rules of debit and credit).
• Consists of at least one debit and one credit
• Record transaction in journal, including a brief
explanation
• Debits are ALWAYS entered first in an entry.
• Credits are INDENTED and listed second
• Use the EXACT account title and do
not shorten
• Never split an entry between two pages
 Uses of General Journal

(1) Record opening balances in a new set off books

(2) Credit purchases or credit sales of non-current
assets (fixed assets)
(3) Writing off a firm’s bad debts
(4) Record any other transaction (including
correction of errors) that is not relevant to the
other day books
Example:
Record
opening
balances in
a new set
off books
 Example:
Credit
purchases of
non- current
asset
Example:
Write off
bad debts
Example: Record any other transaction that is
not relevant to the other day books
Example: Record any other transaction that is not
relevant to the other day books

June 8 Service rendered to Ramesh of RM12,000

• Ramesh is receiving the services

• Debit the receiver
• Service Revenue is coming in the business
• Credit income & gains
Date Description Debit (RM) Credit (RM)
June 8 Ramesh 12,000
Service 12,000
revenue
(performed
services)
CASH AND
TRADE
DISCOUNT
❖the percentage figure
❖the difference between the list price and the net
price.
❖Businesses often offer a trade discount to certain
customers.
❖Will depend on the amount the customer purchases.
❖Trade discount is shown on an invoice but never
ever appears in the double-entry bookkeeping
(unlike cash discounts).
An invoice with trade discount
How the invoice will be recorded
 CASH DISCOUNT

An incentive that a seller offers to a buyer in return for paying a

bill owed before the scheduled due date.
Example:
1. Credit terms 2/10, n/30. This means you will get a 2%
discount if you pay within 10 days of
receiving the invoice. You must pay the bill within 30 days
or you start to incur interest charges.
2. Credit terms is 2/10, n/30 E.O.M. This means you get a 2%
discount if you pay within the first 10 days of the next
month. You must pay the bill within the first 30 days of the
next month or you start to incur interest charges.
3. Credit Terms is 2/10 R.O.G. This means you
get a 2% discount if you pay within the first 10
days after the goods are received.