What is the general journal method?

Okay, so, what’s the deal with the general journal method? It’s basically like a diary for your business’s money, you know? Everything gets written down in the order it happens. Think of it as a running timeline of all the financial comings and goings.

It has a few key parts, kind of like filling out a form, I guess?

• Date: Well, obviously, this is the date it happened. Duh. Like, if I bought office supplies on July 7th, I’d put July 7th here. Simple enough.
• Accounts: This is where it gets a little trickier. You have to figure out which accounts are affected. So, for those office supplies, I’d probably hit “Office Supplies Expense” and then decrease my “Cash” account. Debits and credits… remember those? Sometimes I still get them mixed up! It’s like a puzzle, but important.
• Description: This is your chance to explain what happened. Nothing fancy, just a quick summary. Something like “Purchased printer paper and pens.” Why is this important? Well, imagine looking back months later and just seeing numbers – you’d be lost!
• Debit/Credit: And finally, the cold, hard cash. How much money are we talking? Here you put in the actual amounts. So, if I spent $25 on supplies, that’s what goes here, split between the debit and credit sides. It has to balance, or you’re doing something wrong! I remember once I spent hours trying to figure out where a measly $2 went… turns out I’d forgotten to include a small transaction. Talk about frustrating!

It might seem kind of tedious, right? Like, who has time for all this detailed record-keeping? But honestly, it’s super important. It helps you track where your money is going, spot any errors (like my missing $2!), and is essential for, well, not getting audited! I heard a story once about a small business owner who didn’t keep good records and ended up in a real mess come tax time. Don’t be that person! Trust me. The general journal, while maybe a bit old-school, is your friend.

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