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5

   The journal 

The journal is the record of prime entry for transactions which are not recorded in any of the other books 

of prime entry.  

You should remember that one of the books of prime entry is the journal. 

The 

journal

 keeps a record of unusual movement between accounts. It is used to record any double 

entries made which do not arise from the other books of prime entry, ie non-routine transactions. For 

example, journal entries are made when errors are discovered and need to be corrected. 

 

BPP Tutor Toolkit Copy

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CHAPTER 5  

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  LEDGER ACCOUNTS AND DOUBLE ENTRY 

 

79 

Whatever type of transaction is being recorded, the format of a journal entry is: 

Date  

Dr 

Cr 

 

 $ $ 

Account to be debited 

 

X 

 

Account to be credited 

 

 

X 

(Narrative to explain the transaction) 

 

 

 

Remember: in due course, the ledger accounts will be written up to include the transactions listed in the 

journal. 

A narrative explanation must accompany each journal entry. It is required for audit and control, to 

indicate the purpose and authority of every transaction which is not first recorded in a book of original 

entry. Some larger organisations require that the above information is entered on a manual journal form 

(sometimes called a journal voucher form) and authorised by an appropriate member of staff, such as 

the Financial Controller. The form is usually attached to documentation to support the reason for the 

journal.  

 

5.1 Examples: journal entries 

The following is a summary of the transactions of Hair by Fiona Middleton hairdressing business, of 

which Fiona is the sole proprietor. 

1 January 

Put in cash of $2,000 as capital 

 

Purchased brushes and combs for cash $50 

 

Purchased hairdryers from Gilroy Ltd on credit $150 

30 January 

Paid three months' rent to 31 March $300 

 

Collected and paid in takings $600 

31 January 

Gave Mrs Sullivan a perm, highlights etc on credit $80 

Show the transactions by means of journal entries. 

Solution

 

JOURNAL 

 

 

$   

$ 

1 January 

DEBIT 

Cash at bank 

2,000 

 

CREDIT  Fiona Middleton – capital account 

 

2,000

 

Initial capital introduced 

 

1 January 

DEBIT 

Brushes and combs account 

50 

 

CREDIT  Cash at bank 

 

50

 

The purchase for cash of brushes and combs as non-

current assets 

 

1 January 

DEBIT 

Hairdryer account 

150 

 

CREDIT  Sundry accounts payable* 

 

150

 

The purchase on credit of hairdryers as non-current assets 

 

30 January 

DEBIT 

Rent account 

300 

 

CREDIT  Cash at bank 

 

300

 

The payment of rent to 31 March 

 

30 January 

DEBIT 

Cash at bank 

600 

 CREDIT 

Sales 

account 

 

600

 Cash 

takings