What is a Journal in Accounting?

A journal is a place of record in which business transactions are recorded in chronological order. A firm may use several specialized journals, such as a purchases journal or sales journal, to separately record transactions in the more high-volume areas. The general journal is used to record more general, lower-volume transactions. Once entered into a journal, transactions are then posted to general ledger accounts. Journals are the best source of information when researching the nature of business transactions, since they identify source documents.

Entries made into a journal employ double-entry accounting, where balancing debits and credits are used. The entries also state the date, accounts impacted, and amounts, as well as an identifier for the source document.

What Are the Characteristics of an Accounting Journal?

While there are several types of accounting journals, they all have the same characteristics, which are as follows:

Chronological recordation. Transactions are recorded in the exact order they occur, providing a timeline of financial events. This helps track financial activities day by day.
Double-entry accounting. Each transaction involves at least two accounts, one debit and one credit, ensuring the accounting equation (Assets = Liabilities + Equity) remains balanced.
Detailed descriptions. Each entry includes the date, accounts involved, amounts, and often a brief description of the transaction to clarify its purpose.
Unique transaction identifier. Each entry is often numbered or referenced uniquely to help with tracking and cross-referencing with other records.
Unadjusted entries. The entries in a journal are typically unadjusted; adjustments, corrections, and summary information are made later in the general ledger or in adjustment entries.

Types of Accounting Journals

An accounting department will typically only use a journal to store specific types of transactions for which there is a high transaction volume level. This tends to restrict the number of journals to a small group, which are as follows:

Cash payments journal. Used to record all types of cash payments made by the organization.
Cash receipts journal. Used to record all cash receipts by the organization.
Purchases journal. Used to record all purchases made by the organization.
Sales journal. Used to record the sale of all goods and services by the organization.

In addition, the general journal is used to record all other transactions that are not recorded in these more specialized accounting journals.