Most business transactions are recorded in one of the Books of Prime Entry that have been covered already. There are however, various transactions that are not, for example:
- The owner of a business introduces their own car as an asset of the business.
- There has been no payment of money for the car so the transaction would not be recorded in the Cash Book
- No invoice has been received from the owner so it would not be recorded in the Purchase Day Book either
- Writing off a customer debt that, due to circumstances, will never be received
- Recording payroll taxes that the business owes to HM Revenue & Customs
- Correcting errors that have been made in the ledgers
In order to record these types of entries, a business will need a further Book of Prime Entry and this book is called “the Journal”
The Journal can be used to record any type of transaction and the use of this book will be one of the main topics to be covered in the Bookkeeping Part 2 course.