Journal/Day Book – JSS1 Business Studies Lesson Note (Third Term)

A journal, also called a day book, is a book of original entries that contains daily records of business transactions. It can be general or special. The general journal records transactions that do not belong in a special journal, such as opening and closing entries. Special journals record only one type of entry, such as sales, purchases and returns.

Behavioural objectives

By the end of the lesson, students should be able to:

1. define a journal;
2. state the two types of journal;
3. list the uses of the general journal;
4. name the four special journals;
5. record simple sales, purchases and returns transactions in the correct journal.

What is the general journal?

The journal could be general or special. The general journal is used to record transactions that cannot be entered in a special journal. It contains the date, the amounts to be debited and credited, and a description of the goods. The general journal is also called the journal proper.

Uses of the general journal

1. It is used for opening and closing entries.
2. It is used to correct errors.
3. It is used to record purchases and sales of fixed assets.
4. It is used to record transfers between accounts.

General journal

What is a special journal?

A special journal is used to record only one type of entry. The special journals are:

• Sales journal / Sales day book
• Purchases journal / Purchases day book
• Return inwards journal / Sales returns
• Return outwards journal / Purchases returns

What is the sales journal?

The sales journal is also known as the sales day book. It is used to record all goods sold on credit, that is, sales made on credit during the trading period. The total is usually posted to the credit of the Sales Account. For example:

May 5: Sold to Oluchi 5 bags of rice @ ₦1,000
May 10: Sold to Shotunde T. 6 bags of salt @ ₦250 a bag.

Sales journal

What is the purchases journal?

The purchases journal is used to record goods bought for resale. The information for the purchases journal is obtained from the invoice. The book is used mainly to record credit purchases. It is also known as the purchases day book. For example:

Papa Ajasco purchased the following on credit from Marvic Nig. Ltd:

May 10: Office stamp supplied 500.00
May 13: Office furniture 2,100.00
May 20: Office equipment 800.00

Purchases journal

What is the return inwards journal?

The return inwards journal is also known as sales returns. It is used to record all goods sold but returned to the seller because they are defective or substandard. The seller will issue a credit note to the buyer. For example:

May 7: Oluchi returned a bag of rice @ ₦1,000 a bag
May 12: Shotunde T. returned 2 bags of salt @ ₦250 a bag

Return inwards journal

What is the return outwards journal?

The return outwards journal, also called purchases returns, is used to record all goods bought but returned to the suppliers or sellers because they are defective or substandard. The seller will issue a credit note to the buyer to that effect. For example:

Papa Ajasco returned these goods:

May 15: Papa Ajasco returned office furniture 2,100.00

Return outwards journal

Evaluation

1. Define journal and explain 2 types of journal.
2. State two uses of the general journal.
3. Name the four special journals.
4. What is recorded in the sales journal?

Assignment

1. Write up the sales journal for Mark Ventures. June 10: sold to Afilaka P. $ cartons of Chivita @ ₦500 a carton. June is: sold to Jeanta A. 7 cartons of Indomie @ ₦450 a carton.
2. Ibitoye A. purchased the following on credit from Marvic Nig. Ltd:
   
   June 10: Office stamp supplied 1,500.00
   
   June 13: Office furniture 12,100.00
   
   June 20: Office equipment 1,800.00
   
   Write up the above transactions in the appropriate journal account.