Purpose is to use a format that is more efficient than the cumbersome general journal, and to bunch like transactions into one place so that posting can be done for many transactions in one total.
Types of Journals
- Sales Journal - all sales of inventory on credit
- Purchases Journal - all purchases of inventory on credit
- Cash Receipts Journal - all incoming cash (even cash sales)
- Cash Disbursements or Payments Journal or just Check Register - all outgoing cash that is paid with checks.
- General Journal - any entry that doesn't fit in one of the four special journals above (e.g. return of inventory, adjusting entries, closing entries)
SUBSIDIARY LEDGERS
Purpose is to be able to keep a daily balance in the accounts receivable or accounts payable of specific customers or vendors. Needs to periodically be reconciled to the control account in the general ledger.
