Journal

What it means

The journal holds entries in date order; the general ledger holds the same entries by account. They are two views of one set of data.

The journal secures completeness: it shows that no document is missing and nothing was posted out of sequence. That is why it is one of the mandatory accounting books.

The journal in double-entry bookkeeping is not a cash journal. Non-profit organisations using single-entry accounting keep a cash journal that records only receipts and payments. The double-entry journal holds every entry, including those where no money moved at all, such as depreciation.

How it works in practice

Every entry ties to an accounting document with a date, amount and accounts. Software maintains the journal automatically, but documents still need to be numbered in series.

In an inspection the journal and the ledger are produced first. They must agree with each other and their totals must tie to the trial balance.

In an inspection, an audit or a due diligence before a sale, the other side wants the journal electronically for the whole period. We prepare an export from the accounting software with document numbers and accounts, so it can be filtered and checked against the ledger without retyping anything.

What to watch out for

Retrospective changes after a period closes are made by correcting entries, not by rewriting the originals. A missing audit trail is a bigger problem in a tax audit than the error itself.

Gaps in the document numbering. When a number is missing from the sales invoices, the tax office asks whether undeclared income is hiding behind it. A cancelled document is therefore never deleted but kept in the series with a note on why it was voided.