The term special journal is familiar to accountants.
For small-scale companies, they will usually use a general journal to record various kinds of transactions. As for special journals, usually for large-scale companies.
For more details about this journal, here is a complete explanation.
Read Also : Assessment: Definition, Purpose, Types and Preparation Tips
Definition of Special Journal
A special journal is a journal for recording various types of similar transactions and also occurs repetitively or repeatedly. Special journals are usually for large-scale companies, because they have far more transactions.
Recording in this type of journal exists so that the records don’t fill up the general ledger quickly.
Although later the total amount in the special journal will periodically be included in the general ledger, in a much more concise and periodic form.
Special Types of Journals
The following are several types and examples of special journals according to their uses, including:
1. Special Purchase Journal
Special purchase journal is a special journal to record purchases of merchandise on credit.
The function of this journal is to simplify recording and facilitate the recording of transactions that have high volumes in the general ledger .
When a credit purchase occurs, enter the transaction value into the accounts payable column.
2. Sales Special Journal
Next is a sales special journal to record sales transactions of goods or services in a company on credit.
This journal records all sales transactions that occur, including the amount of goods or services sold, prices, discounts, taxes, and shipping or delivery costs.
The use of this journal when credit sales are high. Each sales transaction is recorded in the form of a journal entry consisting of debits and credits.
The special sales journal is usually used in conjunction with the special purchases journal and the general journal to help produce an accurate and detailed audit of financial statements .
Read Also : What is the Benefit Cost Ratio? Definition, Benefits, and Examples
3. Special Journal of Cash Receipts
A cash receipts special journal is a journal used to record all cash receipts received by an entity or company within a certain period.
This journal usually consists of several columns, such as:
- cash receipt date
- information
- source of acceptance
- amount of cash receipts
Examples of use cases include companies receiving payments from customers or selling assets. Every time there is a cash receipt, information about the receipt must be recorded in a special cash receipts journal.
4. Cash Disbursement Special Journal
A special cash disbursement journal is an accounting record that records every transaction related to cash disbursements or cash payments within a company.
The purpose of this journal is to record and monitor each cash disbursement so that it can be accurately calculated the amount of cash in a certain period.
This journal also records the details of each transaction, such as
- date
- information
- issued amount
- source of output
By recording every cash disbursement in this special journal, companies can monitor their cash flow and control expenses so they don’t exceed a predetermined budget.
Read Also : 3 Easy Ways to Calculate Salary Increase Percentage
Benefits of Special Journals
After learning about examples of special journals, what will then be discussed are the advantages and benefits, including:
1. Ease of Automatic Recording
First, you will get the convenience of recording systematically. Grouping the recording of financial transactions in special journals will make the process of making financial reports much more systematic and easier.
This convenience will also make the process of recording in the general ledger more efficient and practical.
2. Process Transaction Data Quickly
The next benefit is speeding up the processing of transaction data. The existence of data grouping, the processing of financial reports will also be done more quickly.
For example, if there are 50 similar transactions, a general journal will still be recorded and grouped 50 times as well.
Meanwhile, if you use a special journal, you only need to group the data once, based on the type of account.
3. Simplify Data to Ledgers
Posting a transaction data to a ledger with a special journal can be done periodically as well as more practical and easy.
It is certain because in this journal all existing and similar transactions will be recorded in the same account. So that posting of several financial transactions can also be carried out simultaneously based on the type of account.
4. Facilitate Periodic Checks
With a special journal, similar financial transactions that have been recorded in many companies can be recorded in a concise and practical way in one journal.
So, this will make it easy for internal and external financial auditors to carry out an examination.
5. Reducing the Risk of Changing Data
Journal entries are chronological and also detailed, so that transaction processes are recorded every day and in full. This can reduce the risk of data modification and fraud by certain parties in the future.
The possibility of making false reports in this account will also be reduced because there is a party who is responsible for the correctness of the transaction data in this special journal.
6. There is Job Specialization
There is a division of special journals into four types of transactions creating a specialization in recording. So this will be able to make the results obtained so much better.
7. Control to Avoid Fraud
Changes to false reports or other fraudulent actions on the account will be monitored and it is much more difficult to do because this journal transaction will be recorded chronologically and there is also a certain party who is responsible for the truth.
8. Increase Work Efficiency
The work of recording transactions in a business can be done by several employees who are already proficient in this matter, so this is not only done by one accountant, with a special journal, the process can be more efficient.
Meanwhile, when you use a financial reporting application , financial transaction work is easier to do efficiently and integrated.
9. Minimizing Errors
For each special journal they will be handled by a certain person, who is already proficient with the job given.
That way, there will be many checks from many parties and this will also have an impact on reducing errors in bookkeeping.
You can also use a bookkeeping application to record all financial transactions automatically and accurately.
10. Make it easier to enter data details
In a special transaction journal entry, one line is designed to provide all the required information.
For example, the purchase of merchandise is recorded on one line. This line will include the credit to the supplier’s account and the supplier’s name, the date and the amount of information you want.
11. Better Internal Controls
In addition, there are other benefits such as better internal control will be formed.
The financial journal will make it possible to divide a job among several employees.
12. Existence of Future References
Transactions of a similar nature are recorded in a special journal.
This will also be useful as a future reference and can make recording a transaction easier.
How to Record in a Journal
The way of recording between general journals and special types is actually not much different. Things to note for this are the steps before entering it into a journal.
Here’s how to enter the data:
- Identify each transaction that enters the general or special journal. Don’t make mistakes when entering transactions.
- Identify the existing balance, whether to reduce or actually add to the initial balance. Pay attention to the amount of the initial balance and also the type of transaction for identification.
- Be careful when writing a nominal value for each transaction, so you don’t make mistakes in writing.
- Also do an analysis to find out what’s on the debit and what’s on the credit, because they have to be the same.