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RD, Certified Public Accountant (CPA)
Category: Finance
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Experience:  MBA, CPA
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The general journal is the book of original entry but how ...

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The general journal is the book of original entry but how does recording in the journal improve the audit trail? What are the differeences between the journal and ledger?
Journals, also called books of original entry, are used to systematically record all accounting transactions before they are entered into the general ledger. Journals organize information chronologically and by transaction type.

The General Journal is a record of all transactions which do not pass through the checkbook, including non-cash transactions (such as accrual entries and depreciation) and corrections to previous journal entries. They provide the detailed information on the entry recorded and reference it to the vouchers, documents etc. Hence, the Journal improve the audit trail and provide detailed information on a transaction which is not available in a General ledger.

The General ledger organizes information by account. It posts the entries from the General Journal into respective accounts and provides information on changes in the accounts. For detailed information, it references back to the Journal entries.

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