General journals are used to record:
(a) opening notes
(b) purchase and sale of fixed assets on credit
(c) take possession of the asset
(d) admission of assets and money to increase capital
(e) correction of errors
(f) closing entries
(g) transfer records
(h) miscellaneous things that can not be recorded in other journals
Opening Notes
1. The opening entry records the remaining assets, liabilities, and capital at the beginning of the accounting period.
2. All assets are recorded on the debit side whilst all liabilities are recorded on the credit side.
Asset → Debit
Liability → Credit
3. Capital sought with the following formula:
Capital = Assets – Liabilities
4. The amount of the debit must equal the amount of credit, regardless of the number of debit and credit items.
Example:
On 1 July 1998, Lily’s Business has assets and liabilities as follows:
Shop equipment RM18000
Cash RM500
Stock RM1500
Bank loan RM5000
Debtors: Reza RM3200
Creditors: Company Lim RM2800
Posting Post Opening to Ledger
1. During posting to the ledger, the details next to the debit of the General Journal are posted to the side of the ledger account debit. Similarly, the details next to the General Journal credit are posted to the side of the ledger account credit.
2. All debtor’s accounts are recorded in the Sales Ledger or Debt Leader.
3. All creditor accounts are recorded in the Lejar of Purchasing or Leaning Payables.
4. All revenue, expenses, assets, liabilities, take-up and capital accounts recorded in the General Ledger.
5. Folio space records page references when posting is done between books.
Purchase And Sale of Fixed Assets on Credit
January 3 Buy a RM600-worthy cabinet from Zi Wei Company for business use.
9 A used van worth RM15000 is sold on credit to Jonathan’s Business.
12 A used typewriter with a RM220 book value is sold on credit to Farah for RM250
Takeout of goods and assets
(a) Lim’s Book Store manufactures RM60 worth of stationery for personal use.
(b) Take a RM320 office typewriter for use at home.
(c) Salleh Furniture Store takes a cupboard costing RM250 from its stock for office use.
(d) Half of the payment amount paid at RM160 is the rate of payment for the residence.
(e) Johana Small Shop produces RM1200 worth of goods from her shop to be distributed as a free sample.
Admission of Assets and Money to Increase Capital
Example:
March 2 Transfer money RM10000 from personal Bank Account into business Bank Account as additional capital.
4 Bring in own computer worth RM3800 for business use.
