Accounting is the process of recording economic activity and organizing this information in a format to inform owners about financial results. It all begins with the journals and ledgers. The initial entry is recorded in one of many journals and then transferred to the respective ledgers where the data is summed and reported to the management team. This article explains how journals and ledgers relate to each other and how the end results are organized.
The general journal is a particular book within accounting that records entries that are abnormal, recurring or a part of the monthly closing cycle. It is generally used by accountants and not bookkeepers to record these unusual entries.
Journals are similar to diaries whereby entries are in chronological order. Smaller businesses will solely use the general journal to record all entries (a business with less than $50,000 per year in sales).
One of the many tasks for bookkeeper in their daily operations is reconciling accounts including bank accounts, accounts receivable, accounts payable and many others. Invariably, the balances are off and need adjusting. To reset or balance the account the bookkeeper must use an adjusting journal entry.