Accounting journal basics

Are you wondering exactly what your company's accounting journal, or journal book, should contain?

Accounting is a discipline that enables you to codify and keep a record of the accounting operations carried out every day in the course of your business. And the accounting journal ensures that all these operations can be traced.

This is why it is a compulsory accounting document for the vast majority of organisations. So let's take a closer look at what they are.

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What is an accounting journal?

Accounting journal: definition

The accounting journal (also known as the journal book, general journal or centralising journal) is a compulsory document for businesses and commercial companies:

• record all the company's accounting transactions in chronological order, on both the credit and debit sides,
• order the entries for the current accounting period according to their nature (purchase, sale, cash flow, etc.).

Accounting journal: debit and credit

The journal is presented in the form of a table, which includes the following:

• The debit column 👉 the debit corresponds to what is due, to cash outflows. For a company, this means, for example:
  • amounts due to suppliers,
  • the loan taken out with the bank.

• The credit column 👉 On the other hand, credit is defined as cash inflows. On the business side, this includes
  • customer invoices received
  • fixed assets or stocks still in the company's possession.

☝️ Important: to comply with the principle of double-entry bookkeeping, transactions must balance: the sum of debits = the sum of credits.

Example of an accounting journal

In practical terms, what does a journal book look like?

Here's an example to help you:

This example of an accounting journal will give you an overview of the mandatory information you are expected to enter, i.e. :

• the account number of the transaction,
• the date on which the transaction was carried out
• the name of the transaction, or accounting entry ☝️ Note that it must be accompanied by the number of the corresponding accounting document,
• the amount (in the national currency of the country where the company's head office is located), in the debit or credit column.

The different types of subsidiary accounting journal

To record accounting entries and the associated supporting documents, a company may use different journals depending on the type of accounting. These are called subsidiary journals and are then grouped together in the centralising journal.

Some companies choose to do this to make it easier to manage the flow of information into the main journal.

Here are the different types of subsidiary accounting journals:

• Cash accounting journals. In cash accounting, there are at most two different types of journal:
  • the cash journal, comprising the cash journal and the bank journal;
  • the miscellaneous transactions journal (for other transactions not included in the cash journal).
    
• Commitment accounting journals. In accrual accounting, several subsidiary journals are generally established, the main ones being :
  • the purchase journal, which includes accounting records of invoices received from suppliers and fixed asset suppliers;
  • the sales journal, which includes accounting entries for invoices sent to customers;
  • the cash journal, for entries relating to bank and cash movements;
  • the miscellaneous transactions journal (or OD journal), for entries not recorded in the above-mentioned journals.

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How do you keep an accounting journal?

To keep your accounting journal correctly, remember to apply the following good practices!

💡 Choose the most appropriate method, depending on the amount of information to be processed. In other words, ask yourself whether you are going to keep a single accounting journal or consider subsidiary journals instead.

💡 Choose the medium on which you want to keep your journal book. The law allows accounting journals to be kept in either digital or paper format (in a register, for example). However, they must not contain any blanks or erasures. So it's best to use an Excel-type computer file, or even dedicated software:

• Indy automates and simplifies accounting management for the self-employed by synchronising with your bank in real time to retrieve your data, transform it into accounting lines and classify it in the right accounts. As a result, you benefit from an accounting journal that Indy fills in automatically throughout the year! Indy guides you step-by-step through the tax closing process, so you can easily send your tax return electronically to the tax authorities or your AGA.
  
  
• Sellsy Facturation & Gestion simplifies pre-accounting for VSEs and SMEs by automating the production of journal entries (purchases, sales, etc.). Time savings guaranteed! Your accountant or chartered accountant then has access to your account and this information to manage more complex transactions.

💡 Don't forget any compulsory information. As a reminder, these are:

• the account number to which the accounting entry relates,
• the date of the transaction
• the name of the accounting entry,
• the number of the associated accounting document,
• the amount of the transaction, on the credit or debit side.

💡 F inally, the accounting journal is used to control accounting entries. This is why you must ensure that you keep it for at least 10 years, from the end of the financial year concerned.

To find out more about keeping an accounting journal, read our article on how to keep an accounting journal.