A Journal is an accounting record that is used to record the different types of transactions in chronological order or date order. Journals are often called or referred to as the books of original entry. The reason is that this is the first place that business transactions are formally recorded. You can think of a Journal as a Financial Diary.
Specialized Journals are journals used to initially record special types of transactions such as sales and purchases. All these journals are designed to record special types of business transactions and post the totals accumulated in these journals to the General Ledger periodically (usually once a month).
The General Journal
The Journal is a textual record of events (Debit and Credit) that is characterized by the fact that all the records it contains are in a sequential chronological order. The General Journal is used to record unusual or infrequent types of transactions. Type of entries normally made in the general journal include depreciation entries, correcting entries, and adjusting and closing entries.
The Cash Book
The Cash Book is used to record the receipt and payment of money by the business in the form of cash, or through the business bank account. It contains the cash and bank accounts.
Sales Journal
The Sales Journal is a special journal where Credit sales to customers are recorded. Another name for this journal is the Sales Book or Sales Day Book.
Purchases Journal
The Purchases Journal is a special journal where Credit purchases from customers are recorded. Another name for this journal is the Purchases Book or Purchases Day Book.
Returns Inwards Journal
The Returns Inwards Journal is a special journal that is used to record the returns from debtors and allowances of goods sold on credit. Another name for this journal is the Sales Returns Book.
Returns Outwards Journal
The Returns Outwards Journal is a special journal that is used to record the returns to creditors and allowances of goods purchased on credit. Another names for this journal is the Purchases Returns Book.
The Petty Cash Book
This is just a fancy name that describes a special fund that is set up and used for minor and unanticipated cash expenses where a cheque can’t be written or the amount is so small that you don’t want to write a cheque. The petty cash account is based on the Imprest System which is a system of cash disbursement, cash expenditure and reimbursement of that expenditure.