Legal Definitions - general journal

A general journal is a type of accounting journal that businesses use to record transactions that do not fit into any of their specialized journals. These specialized journals include sales journals, purchase journals, and cash receipts journals. The general journal is used to record transactions that are unique or infrequent, such as adjusting entries, depreciation, and bad debt expenses.

For example, if a business purchases a new piece of equipment, they would record the transaction in the general journal. Another example would be if a business needs to record an adjusting entry for accrued expenses at the end of the month, they would use the general journal.

The general journal is important because it allows businesses to document all of their day-to-day inflows and outflows of the business to be used later in the ledger. The ledger is a record of all the accounts used by the business, and the general journal provides the information needed to update these accounts.

Overall, the general journal is a crucial tool for businesses to maintain accurate financial records and comply with generally accepted accounting principles (GAAP).