A General Journal in Accounting.


I am not the sharpest tool in the shed, and I am in a course that has basic accounting as part of the curriculum. I am really struggling to understand the concept.

In: 1

When your company buys or sells something, you make a journal entry to keep track of what you spent money on. You keep track of the date, what you got, and what you spent. This makes it easy to go back at the end of every accounting period and total everything up, so that you can prepare a financial statement to show the shareholders.

It is also a record for the Tax Authorities to check you have been paying the correct amount of tax.

It’s a journal and instead of English (“Dear Diary, I paid for a $1,000 computer in cash”), it uses a standardized language of accounting. that line translates to this:

Debit – Computer $1,000

Credit – Cash $1,000

EDIT: Formatting