What’s there to discuss about the general journal? I’ve explained why it is your most versatile accounting tool in the articles section of the blog. So what else is there to talk about? Well, here are some tips that may be helpful:
When writing general journal entries it is a good idea to work with a format and stick with it. For instance, write the debit first and place it to the far left under the description column. Use only the name of the general ledger account. On the next line, write the credit, but indent three spaces. In the next column write the general ledger account number. On the right side of that column create a column for the debit entries and one for the credit entries.
Date or Ref # Account Description GL Number Debits Credits
11/01/XX Bank Charges 8600 25.00
Cash 1010 25.00
To record a NSF fee for check 3366
I’m limited as to drawing forms in this blog format, but you get the idea. A rule of thumb regarding the description is that each journal entry must stand on its own. In other words, if a total stranger read your description he/she would know the purpose of the journal entry. It is real easy to get lazy about writing the descriptions, but you will pay for it later when you are trying to figure out what transpired.
If you are consistent in keeping the same format, you will find that it is easier to mentally locate information you are looking for. It’s part being organized which is half the battle when doing accounting work.
Another tip is to place the general journal page right behind the financial statements you have prepared in a manila folder. That way when you are analyzing an account you will have the critical information you need at your fingertips. I always place the financial statements on top, followed by the general journal entries, and then the computer batch reports from entries made from the cash disbursements journal and the general journal. Underneath all of that, I place a detail of the general ledger report. I use a two-hole punch with fasteners to hold everything in place. This way it’s all there when I need it.
Imagine what it would be like if you never followed the same format, forgot to write descriptions of transactions, and had the various source documents scattered all over the office. You would spend half your time and energy being frustrated.
Any thoughts?
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