Topic 7: The General Journal

Question 1

1. What is a general journal?

Answer 1

A general journal is used to record those transactions that cannot be recorded in any other Journal.

Question 2

2. State examples of transactions recorded in general journal.

Answer 2

Examples of transactions recorded in general journal:
● Purchase of non-current assets on credit.
● Sale of non-current assets on credit.
● Withdrawals of non-current assets/business inventory for personal use.
● Capital contribution of non-current assets/inventory by owner.
● Opening and closing entries
● Balance day adjustments for accounting for depreciation, accruals and prepayments, impairment loss on trade receivables, allowance for impairment of trade receivables and correction of errors.

Question 3

What are the advantages of using the General Journal?

Answer 3

● The narrations make it easy to recall and understand the transactions.
● It is easier to trace a transaction as the entries are recorded in order of date. This also makes it easy to detect fraud.
● It reduces the error of making only one entry as each journal entry requires a debit and a credit.