Here we will learn about types of special journals but we need to know first what is a journal entry and special journal entry?
The special journal is an important thing for every firm that makes countless daily transactions. The special journal is called where a firm records day-to-day transaction history.
Many rich quality accounts of a firm call it the “book of original entry” because every transaction gets into a special journal.
In short, a special journal is a journal where all transactions get entered. Let’s know about all types of special journals.
A general journal is a file of shortly listed every single journal for transactions that don’t logically belong in one among the special journals. The general journal is one of the various types of special journals.
There could be countless entries in previous months; a general journal should help you in finding a specific one from all easily. Transactions area unit records of a transaction within the general journal.
Depending on the dimensions of the business, either all entries are units recorded in the general journal. Along the way, there are several special journals specifically that are solely adjusting, reversing, or non-routine entries area unit engaged with the general journal.
Special Account Journals
It’s generally for highly developed financial firms who have made tons of similar transactions daily. When a firm has so many similar transactions that are similar to a name as well then the company uses special account journals.
Into special account journal a journalist input every single data of all transaction so that, he/she can easily mark a specific transaction easily.
In the special account journal, we create generally 3 lines which are below:
- Two to list the accounts and
- One to explain the dealings
The dealings should be written including every data clearly of all individual account transactions into the journals. If the deadlines create an effect on the general journal then, a personal accounting journal could be used as a further solution.
The posting of entries should be done twice: once to the book account and once to the dominant book of account, is that clear?
To do hurry up with this method, account holders of a firm may use special accounting journals to record repetitive transactions and transactions which are doing frequent or remarkable transactions.
Such transactions would be documented on one line in a special account journal in order to remark those transactions easily and rather than individually posting individual entries in the special accounting journal, it would be easy if that journalist uses the general journal for primary transactions.
The special journal is a journal that is used to record similar types of transactions. Special journals are so much important for merchandise enterprises. It classifies the common types of transactions within the separated accounting records.
For this reason, the accounts can be easily controlled. We can understand the ultimate result of some common transactions from a special journal. It also summarizes the most occurred transactions with a common characteristic. There are four types of special journals all of them are discussed with their uses.
Types of Special Journals
The common four types of special journals are discussed below:
- Sales journal,
- Purchases Journal,
- Cash Receipts journal,
- Cash Payments Journal.
A sales journal is a special journal used to record all sales of merchandise on account. The sales journal notes all credit sales delivered to customers. Sales revenues and cash sales are not listed in this journal.
Records in the sales journal typically incorporate the date, invoice number, client name, and quantity.
Invoices are the authorization documents that present this information. In its most elementary form, a sales journal has only one column for recording performance amounts. Each entry raises (debits) accounts receivable and supplements (credits) sales.
Use: it is used for recording only credit sales.
The Purchase journal is a special journal used to record all purchases of merchandise on account. The purchases journal lists all credit investing of stock. Entries in this journal normally include the date of the listing, the sign of the supplier, and the expense of the transaction.
Some organizations include columns to recognize the invoice date and credit cycles. Thereby making the investments Journal a tool that helps the businesses take advantage of decreases just before they stop.
The purchases journal to the freedom has only one column for entering transaction expenses. Each entry doubles (debits) purchases and advances (credits) accounts were owed.
Each day, individual records are posted to the accounts due to subsidiary entry reports.
Creditor account estimates (or checkmarks if the creditor accounts aren’t counted) are located in the purchases journal’s associated column to register that the entries have been staked.
At the end of the accounting period, the cylinder total is posted to purchases and accounts payable in the universal ledger. Account numbers are assigned in parentheses in the column to register that the total has been posted.
Use: it is used for recording only credit purchases.
Cash Receipts Journal
A cash receipts journal is a special journal used to record all cash received. Transactions that improve cash are recorded in a multi‐column money receipts journal. If sales commissions are offered to customers, the journal introduces a separate debit column for sales commissions.
Credit columns for records receivable and for sales are frequently present, but companies that frequently receive cash from other, specific sources use additional columns to record those types of cash receipts.
In addition, the cash receipts journal includes a column named Other, which is used to record various types of cash receipts that occur infrequently and therefore do not warrant a separate column.
Use: it is used for recording only receipts from any source.
Cash payments Journal
A cash payments journal is a special journal used to record all cash paid. Transactions that waste cash are recorded in the cash expenditures journal. The capital expenditures journal to the title has one debit column for statements payable and another debt tower for all other types of cash payment businesses.
It has credit columns for purchases discounts and for cash. Since each entry accounts for a control account (accounts payable) or a description listed in the editorial named Other, the particular account being charged must be identified on every line. The character of each company’s business determines which columns this journal holds.
For example, companies sometimes choose to stay separate debit towers for regularly used reports such as salaries expense, sales fees expense, or other specific accounts moved by cash payments.
Use: It is used for recording only cash payments to any sector.
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