Test your knowledge of the general journal by answering the 10 short questions given below. We strongly recommend attempting to answer each question yourself before checking the answers. If you're unsure about the answer to any of these questions, read this website's article covering the general journal to learn more.
1.
What is a journal?
2.
What is a journal entry?
3.
What is meant by narration of the journal entry?
4.
What is a compound journal entry?
5.
What does journalizing refer to?
6.
How are trade discounts recorded in the journal?
7.
Why is the journal called the book of original entry?
8.
$950 in cash is received from Mr. Smith (an account receivable) in full settlement of his account of $1,000. How would you record this transaction in the general journal?
9.
$480 in cash is paid to Mrs. Jackson (an account payable) in full settlement of her account of $500. How would you journalize this transaction?
10.
What is the purpose of the posting reference column in the journal?
General Journal Q&A FAQs
A General Journal is a chronological record of financial transactions not recorded elsewhere. They include all the company's business transactions, whether cash or credit.
A General Journal is important because it provides a complete, sequential history of a company's financial transactions. It can help identify errors and provide a detailed view of its financial health.
Examples of transactions that would be recorded in a General Journal include cash receipts, cash payments, credit purchases, credit payments, and Depreciation.
A journal is a chronological record of financial transactions, while a ledger is a summary of financial transactions that have been recorded in a journal. Ledgers are usually divided into accounts, which track specific aspects of a company's finances.
To record a transaction in a General Journal, you would debit the affected account and credit the impacted account. For example, if you purchase supplies on credit, you would debit the accounts payable account and credit the cash account. This ensures that the company's financial transactions are accurately tracked and accounted for.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.
