Type of Journals in Financial Accounting System

7 Different Types of Journal Book

Under the double-entry system, there are mainly 7 different types of journal in accounting. Transactions are primarily recorded in the journal and thereafter posted to the ledger.in modem times the use of many journals instead of one journal has been introduced in almost all business concerns, especially the medium and large size business concerns.
The transactions of the same nature are recorded in a special journal. These are termed as a daily journal, subsidiary journal or special journal.

Types of Journal in Accounting

1. Purchase journal
2. Sales journal
3. Cash receipts journal
4. Cash payment/disbursement journal
5. Purchase return journal
6. Sales return journal
7. Journal proper/General journal

Purchase Journal

The special journal used for recording the credit purchase of merchandise is called a purchase journal.

In purchase journal transactions of merchandise purchased on credit for sale are recorded. An asset purchased on the account is not recorded in the purchase journal.

But many are of the opinion to record all credit transactions in the multi-column purchase journal.

Sales Journal

Sales journal is used for recording the credit sale of merchandise only.

Cash sale of merchandise is recorded in the cash receipt journal. A credit sale of an asset is recorded in general journal.

Cash Receipts Journal

The special journal used for recording all types of cash receipts is called the cash receipts journal.

In modem age, the introduction of cash receipts journal is in practice in medium and large size business organisations.

All kinds, of cash receipts, are recorded in this journal. The main sources of cash receipts are two; Cash from cash sale and cash from accounts receivable.

Cash Payment Journal

The; special journal used for recording various transactions relating to cash payment is called a cash payment journal. Business concerns usually pay debts by cheques.

Payment by cheque is treated as a cash payment.

For the acceptability of cash payment, business organisations pay bills by cheques. The cash payment journal contains many money columns as cash payments are made under many heads.

Payment to accounts payable is an important item among the cash payment items and for this account payable provision for a separate debit, the money column is made in cash payment journal.
Purchase Return Journal

The special journal, where purchase returns of credit purchase are recorded, is called a purchase return journal.

In the case of isolation of purchase agreement or in the case of defective goods the purchaser returns the- goods to the seller. While returning goods to the seller a slip containing reasons for the return of goods is sent along with goods.

This is called a debit note. The seller also sends a note to the purchaser as a reply which is called a credit note. It may be mentioned that goods purchased on cash if returned are not recorded in the purchase return journal.

Sales Return Journal

The special journal, where the credit sale returns are recorded, is called a sales return journal. The sales return journal is prepared from debit notes sent by the buyer with returned goods. In reply, the seller sends a credit note.

The format of sales return is similar to that of sales journal excepting invoice column where credit note is written.

It may be mentioned that where the sales return transactions are large in number this sales return journal is maintained.

But where such return transactions are very few in number, these are recorded in the general journal.