Explanation :Companies use many different types of journals to record their transactions like the sales journal, cash receipts journal, and the accounts payable journal. All of these different journals are optional and can be used if the company wants to. The only journal that is used by all companies is the general journal. A journal stores a complete record of every business transaction the company makes. This usually includes the transaction date, transaction description, accounts that were affected, as well as the debits and credits.
In a nutshell :
- A journal is a detailed record of all the transactions done by a business.
- Reconciling accounts and transferring information to other accounting records is done using the information recorded in a journal.
- When a transaction is recorded in a company's journal, it's usually recorded using a double-entry method, but can also be recorded using a single-entry method of bookkeeping.
- The double-entry method reflects changes in two accounts after a transaction has occurred; an increase in one and a decrease in the corresponding account.
- Single-entry bookkeeping is rarely used and only notes changes in one account.
- A journal is also used in the financial world to refer to a trading journal that details the trades made by an investor and why.