Friday, October 23, 2009

Purpose of Accounting Journal Entry

Accounting Journals can be classified as specialized journals (Generally, these are Sales Journal, Returns Inwards Journal, Purchase Journal and Return Outwards, Cash Receipt Journal, Cash Payment Journal) or as a General Journal

Accounting Journal Entries serve several main purposes or roles in the accounting cycle

  • Removes unnecessary details in the ledger as only totals are posted to the main accounting ledger. 
  • An accounting journal entry records similar transactions such as credit sales of goods into one book in order of their occurrence
  • Provides an important middle step between source documents and the ledger accounts for accountants to examine, AND
  • Serves as an aid for posting to the general ledger by analyzing a transaction into its debit and credit entry to see exactly which main journal accounts are affected .

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