Accounting Journal Definition

Cite this article as:"Accounting Journal Definition," in The Business Professor, updated March 19, 2019, last accessed October 22, 2020,


The Journal (Accounting) Definition

A journal is an account in which a business records its financial transactions. Businesses use the journal to transfer information or reconcile records of income and expenditure with the entries in a general ledger. Records in a journal include dates of transactions and the amounts spent or earned. The account plays a vital role in the record-keeping functions of an entity and requires objectivity.

The journal provides a summary of transactions and facilitates the transfer of records for accounting applications. During audits and trade processes, the journal is an important account auditors will review.

A Little More on What is an Accounting Journal

A journal can be a physical or digital financial document. It can exist in a book or as data entry in digital files such as spreadsheets or QuickBooks. Whenever a business carries out a financial transaction, the bookkeeper makes an entry into the journal. Each journal entry states whether the transaction was an income or expenditure. While bookkeepers may use the single-entry method, the double-entry method is the most common form of recording transactions in a journal.

Double-Entry Accounting Method of Bookkeeping

In accounting, the double-entry method is the preferred method of recording inputs in journals. It is the most common because each transaction happens between two accounts, thus the bookkeeper needs to enter the details in two columns.

If a business spent $1000 cash to buy inventory, the bookkeeper enters the transaction under cash account as a deduction and inventory account as an addition.

Single-Entry Accounting Method of Bookkeeping

This method is a basic form of a journal entry and is not common in bookkeeping. The setup is like a checkbook in which the bookkeeper records the total cash inflows and cash outflows in a single account.

From the example above, the single-entry system enters the $1,000 reduction in cash and shows the new balance at the end of the entry. To avoid confusion, the bookkeeper may separate income and expenses into two columns.

Journal in Investing

In the investment and finance sector, a journal is a valuable record. It provides investors and professional managers a comprehensive history of a company’s financial transactions. During tax filings, audits, and evaluation exercises, the journal gives a verifiable account of a business’ finances.

Traders also use journals to track their trading history. It summarizes wins and losses, watch lists, and other details that help fine-tune investment strategies for better results.

References for the General Journal

Academic Research on General Journal

  • The General Journal: Correction of Errors, Stott, J. R. (1982). In Mastering Principles of Accounts (pp. 86-94). Palgrave, London. This article summarizes the functions of a journal. The journal is the book of prime entry where all bookkeeping transactions are first recorded.
  •  … the its necessity. especially during Australia. Hombsch (1897) for illustrated full entry set of first edition repetition in the (general) journal of all transactions …, Parker, R. H. (2013). In Accounting in Australia (RLE Accounting) (pp. 459-459). Routledge. This article explains the accounting journal, the types and the uses of the record in financial and business transactions.
  • Data mining journal entries for fraud detection: An exploratory study, Debreceny, R. S., & Gray, G. L. (2010). International Journal of Accounting Information Systems, 11(3), 157-181. This paper advocates the use of data mining techniques to analyze journal entries as a fraud detection tool. According to the researchers, restricted access to journal entry data sets stymied research on data mining journal entries in the past. Applying data mining methods to 29 journal entry data sets yielded surprising results. The researchers found multiple discrepancies, with many journals showing signs of cover up for fraudulent transactions. In conclusion, the paper aims to improve journal entry datasets as a means of fraud detection using multiple indicators and different data mining techniques.
  • XBRL for general ledger, the journal taxonomy, Hannon, N. (2003). Strategic Finance, 85(2), 63. This piece examines the role of the accounting journal in recording business transactions. It also looks at how journals are used for tax, audit, and investment purposes.
  • A risk-based approach to journal entry testing, Lanza, R. B., Gilbert, S., & Lamoreaux, M. (2007). Journal of Accountancy, 204(1), 32. This article provides an overview of the accounting journal, the types, and its benefits for tax, audit, and business applications.
  • Integrated accounting principles: A best practices course for introductory accounting, Warren, D. L., & Young, M. N. (2011). Issues in Accounting Education, 27(1), 247-266. This paper proposes a best practices course called “Integrated Accounting Principles” (AIP). This six-hour course aims to equip students with core accounting knowledge and skills using an active learning method. The course uses multiple innovative learning strategies from accounting and education, and some new teaching techniques. This course is designed to provide maximum student engagement to help participants learn the fundamentals of the accounting profession.
  • How nonfinancial performance measures are used, Stivers, B. P., Covin, T. J., Hall, N. G., & Smalt, S. W. (1998). Strategic Finance, 79(8), 44. This article provides a detailed explanation of the accounting journal and how businesses use it to record cash inflow and cash outflow transactions.
  • can Accounting, BrOSnahan, I. P. (2008). Journal of Accountancy. This paper analyzes nonfinancial performance indicators measured by top companies in the US and Canada. The study examines the indicators measured, challenges of using them in planning, and the attitude of senior company executives to these nonfinancial performance factors.
  •  GENERAL JOURNAL, Room, E. B., MacKinnon, L., & Accounting, M. (2019). SAGE. This article looks at the accounting journal and the roles it plays in recording a business’ financial history.
  • Accounting for rationality: Double-entry bookkeeping and the rhetoric of economic rationality, Carruthers, B. G., & Espeland, W. N. (1991). American journal of sociology, 97(1), 31-69. This paper examines the importance of double-entry bookkeeping according to Weber, Schumpeter, and Sombart. It discusses the rhetorical and technical aspects of accounting. In their conclusion, the authors posit that double-entry bookkeeping can only be appreciated by considering its rhetorical and technical dimensions.
  • Origin and evolution of double entry bookkeeping, Peragallo, E. (1938). This article explains the function of the accounting journal as a prime book of entry in financial transactions.
  • Bookkeeping, accounting, calculative practice: the sociological suspense of calculation, Vollmer, H. (2003). Critical Perspectives on Accounting, 14(3), 353-381. This paper reviews the contribution of accounting scholars to sociology. The paper examines how calculative practices such as bookkeeping and accounting impact society. It concludes that calculative practices help maintain social order and deepen sociological research.

Was this article helpful?