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General Journal in Accounting | How to Prepare Journal Entries? - YouTube
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today we have a topic with us is general
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journal okay as a name itself the
journal the general journal is an
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initial or it's called the journal
entries let's make this simple the
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journal entries is an initial
record-keeping which records all the
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transaction except for the ones which
are recorded a specific a specialty
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journal like you know cash journal we
have purchase journal so whenever any
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event occurs or a transaction happen it
is recorded in a journal and journal can
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be divided into two types speciality
journal and general journal these are
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the two types so a speciality journal
records all these sort of I can call the
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special events transaction that are
related to that particular journalist
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and there are mainly four kind of
speciality Journal one is called the
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sales another is called the cash
receipts
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okay then there is a thing called
purchase general cash disbursement
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journal forget there's are the four
types but the company can have more
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speciality journal depending on its
needs and the type of the transaction
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but the above over here for that have
been mentioned contains the bulk of the
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accounting activities and all of the
transaction which are not entered into
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this facility journals are accounted in
the general journal so this can have the
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following types of transaction like
account receivables accounts payables
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with this is known as your debtors this
is your creditors
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then we have a thing called equipment we
have the accumulated depreciation we
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have expenses interest income it also
includes expenses okay now we'll try and
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discuss the journal general journal
accounting part ok the double-entry
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bookkeeping is the most common method of
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let me just write double-entry
bookkeeping system is the most common
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method of general journal accounting no
this is the most common method of
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accounting every business is done by
exchange between you know the
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transaction is done by exchange between
two accounts so there are equal what we
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call as opposite accounts for all the
transaction namely the there can be
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credit and debits both are possible
hence when a transaction is recorded in
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a journal it debits one account and it
credits another one okay so for example
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let's say for company let's say it
purchases of $5000 of inventory
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now using the cash and inventory in the
journal would be made where by cash
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account is decreased the cash account is
decreased let's say by 5000 and
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the inventory up will be increased by
5000 years okay now I will
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provide you with the format part of the
journal with the general journal format
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it provides the chronological order of
all non-specialized at consists of 4
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or closely 5 columns now the first
one starts with date of transaction then
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there is a short description they also
goes with mem then there is debit amount
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then there is a credit amount post facto
there is a reference number and the
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referencing to the journal ledger is a
very easy indicator okay remember that
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now let's take an example over here
let's look at few examples let's say you
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purchase an asset in that asset you
purchase that asset by cash and let's
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say that is machinery and you purchased
it by cash so machinery account is
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debited cash account is credited to the
extent of let's say you purchased the
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machinery for $1,00,000 so this
will be debited because machine is
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coming in in your company cash you have
paying and that is going out so it will
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be credited debit what comes in credit
what goes out now let's say you incur
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some expenses let's say selling and
distribution expenses that you do
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expense debit and income credit let's
say you are doing this expense by cash
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and it is $5,000 so 5000 debit over here and
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5000 cash is going on credit let's
say now take up and foreign income let's
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say you are receiving an income so cash
is coming in and the income is the
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interest income so interest income
account credit because debit the expense
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credit the income I'll take the same
amount here we took one of asset now
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let's take one of liability let's say
you purchase that same machinery but not
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with cash but with the help of or
liability let's say you you purchased on
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credit so creditors will open up let's
say you purchase from Glen Smith
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and come and that was of 1,00,000 so the
above entry now converts to instead of
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cash there's a liability that is
standing so there are a couple of
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examples that you need you need to
understand so that you know you have a
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great idea about exactly what's going on
now the flow of the process of the
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journal entries now let's look at the
flow of the process of journal entries
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before and after it is recorded in the
journal accounting now before an entry
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is made in journal entries they make
maker has to decide you know accounts
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which will be affected by the
transaction and second which accounts to
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debit and which to credit now after
these entries are properly made in the
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journal in the accounting all this
transaction is summarized right and it
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is posted in ledger now a ledge over
here is an account of the final end
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which is a master account it is the
master account that summarizes the
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transaction in the company and it has
individual accounts that records your
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assets your liabilities
equity your equity than your
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revenues you have expenses gains and
losses now some example of accounts are
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in the ledger our account receivables
accounts payable so this is a your asset
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this is your liability then you have
your retained earnings which is your
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equity liability could you account then
let's say you do product sales so that
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goes with your revenue just taking one
one example of all let's say cost of
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goods sold so that goes as expense
so to summarize every accounting
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transaction is stored in a journal which
acts as an intermediary repository of
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the information which is then recorded
in the general journal ledger so the
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ledger in turn is used to aggregate this
information into the financial statement
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of a business which are called as the
initial trial balance okay so let me
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make my final conclusion on this the
general journal is initial
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record-keeping which records all the
transactions except for the ones which
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are recorded in this specialty journal
like cash purchase journal and it states
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that the date of the transaction the
description credit debit information in
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the double bookkeeping system and the
journal entries are then used to form a
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ledger and the information is
transferred into the respective accounts
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of the ledger of the ledgers are then
used to make trial balance and finally
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the financial statements however these
journals were more visible in the manual
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keeping record-keeping days so with the
advent of the technology the task of
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record-keeping has been made very easy
with all the information being stored in
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a single repository with no speciality
journals
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in use so that's it for this particular
topic if you have learned and you know
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