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Definition of an Accounting Journal

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Definition:

Journal

Short Definition: A journal details all the financial transactions of a business and which accounts these transactions affect.

All business transaction are initially recorded in a journal using the double-entry method or single-entry method of bookkeeping.

Typically, journal entries are entered in chronological order and debits are entered before credits.

Longer Explanation of an Accounting Journal

In accounting, a "journal" refers to a financial record kept in the form of a book, spreadsheet, or accounting software that contains all the recorded financial transaction information about a business.

An accounting journal is created by entering information from receipts, sales tickets, cash register tapes, invoices, and other data sources that show financial transactions. Business transactions should be recorded so that they can be presented in the journal in chronological order.

Before computers, an accounting journal was a physical log book with multiple columns to record financial transactions for a company. Today, most businesses use soft type of financial accounting software to record and manage their business transactions. These transactions are then assigned to a specific ledger class using a Chart of Accounts number to prepare profit and loss statements, financial statements, and other important financial reports.

Each listed transaction is referred to as a journal entry.

Information from the journal is then recorded in ledgers.

Also Known As: Book of First Entry

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