Special Journals
In this lesson, we will learn about the 4 types of special journals, namely the Sales Journal, Sales Return Journal, Purchases Journal and Purchases Return Journal. We will interpret data recorded in these journals and post them to the respective ledger accounts.
These four special journals, together with the General Journal, Cash Book and Petty Cash Book, make up the books of prime entry of a business.
Related Lessons:
Purpose of Special Journals
Business transactions of the same nature are recorded in their respective journals to:
- Enable easy retrieval of information. For example, the business owner can easily see the total sales made to different credit customers at a glance from the sales journal.
- Avoids overcrowding in the General Ledger since only the total amount in a special journal is posted to the General Ledger.
This helps businesses to increase their efficiency in recording thus productivity.
Sales Journal
The sales journal records credit sales made by the business to its customers, known as trade receivables.
A sales journal comprises of four columns recording the date of each credit sale, the original selling price, any trade discounts given, and the net amount owed by the customer.
1st column – Date:
This records the date of each credit sale
2nd column – Trade receivables:
The name of the credit customer for each sale
3rd column – Details:
Records the original selling price and any trade discounts given for each credit sale
4th column – Amount:
This final column records the net amount owed by the customer for each sale
Posting of Sales Journal to Ledger
Each of the sale in the sales journal is posted to the respective trade receivables account.
Only the total sales value is posted to the Sales Ledger Control account and Sales Revenue account.
Sales Returns Journal
The sales returns journal records goods returned to the business by its credit customers.
A sales returns journal has four columns to record the date of each sales return, the original selling price, any trade discounts given, and the net amount returned by the customer.
1st column – Date:
This records the date of each credit sale returned
2nd column – Trade receivables:
The name of the credit customer for each sale return
3rd column – Details:
Records the original selling price and any trade discounts given for each credit sale returned
4th column – Amount:
This final column records the net amount owing to the customer for each sale return
Posting of Sales Return Journal to Ledger
Each of the sale return in the sales return journal is posted to the respective trade receivables account.
Only the total sales return value is posted to the Sales Ledger Control account and Sales Return account.
Purchases Journal
The purchases journal records goods bought on credit by the business.
A purchases journal consists of four columns to record the date of each purchase, the original purchase price, any trade discounts received, and the net amount owed to the credit supplier, known as trade payable.
1st column – Date:
This records the date of each credit purchase
2nd column – Trade payables:
The name of the credit supplier for each purchase
3rd column – Details:
Records the original purchase price and any trade discounts received for each credit purchase
4th column – Amount:
This final column records the net amount owing for each purchase
Posting of Purchase Journal to Ledger
Each of the purchase in the purchases journal is posted to the respective trade payables account.
Only the total purchases amount is posted to the Purchases Ledger Control account and Purchases account.
Purchases Return Journal
The purchases return journal records the returned of goods bought on credit by the business.
A purchases return journal has four columns to record the date of each purchase returned, the original purchase price, any trade discounts received, and the net amount of the return.
1st column – Date:
This records the date of each credit purchase returned
2nd column – Trade payables:
The name of the credit supplier for each purchase returned
3rd column – Details:
Records the original purchase price and any trade discounts received for each credit purchase returned
4th column – Amount:
This final column records the net amount to be refunded by the trade payable for each purchase returned
Posting of Purchase Return Journal to Ledger
Each of the purchase returned in the purchases journal is posted to the respective trade payables account.
Only the total purchases returned amount is posted to the Purchases Ledger Control account and Purchases Return account.