general journal

The general journal is the chronological diary of a business's finances — the very first place a transaction is formally recorded, which is why it is also called the book of original entry. Imagine a running list, in date order, of every financial event: each line says what happened, which accounts moved, and by how much. Before any account balance can be updated, the event is captured here.

Each transaction enters the journal as a journal entry: date, debited accounts and their amounts, credited accounts and their amounts, and a brief explanation. The journal is organized by time, not by account — so all of June's transactions sit together regardless of whether they involved cash, sales, or supplies. This chronological view is valuable because it preserves the story of what happened in order, which is exactly what an auditor or owner wants when reconstructing events.

The general journal is the catch-all journal: it can record any kind of transaction. Many businesses also use special journals (for example, a sales journal or cash receipts journal) to handle high-volume repetitive transactions more efficiently, leaving the general journal for everything unusual — adjusting entries, corrections, and one-off events. From the journal, amounts are later posted to the general ledger, where they are reorganized by account. Journal first (by date), ledger second (by account).