Content Standard 4.2

General Journal

Jurnal Am

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Explanation

The General Journal (Jurnal Am) is a book of prime entry used to record all transactions that are not suitable for, or cannot be recorded in, the special journals (such as the Purchases, Sales and Returns Journals) or the Cash Book. The main purpose of the General Journal is to provide a place to record transactions that occur infrequently, are unusual in nature, or involve adjustments before they are posted to the relevant accounts in the ledger. With the General Journal, every transaction is recorded in an orderly manner by date, accompanied by a short narrative, so that the double-entry system is maintained and the audit trail can be traced easily.

The General Journal has fixed columns: a Date column, a Particulars column (the names of the accounts debited and credited plus the narrative), a Folio column, a Debit (RM) column and a Credit (RM) column. The account to be debited is written first, close to the left margin, then the account to be credited is written slightly indented on the following line, followed by a short narrative in brackets explaining the reason for the transaction. The Folio column is important because it records the cross-reference, that is, the page number or code of the ledger account into which the entry is posted. The folio allows us to trace the posting from the General Journal to the ledger and back, preventing double posting and making checking easier.

Among the transactions recorded in the General Journal are opening entries, used to start a new set of books by recording all opening assets, liabilities and capital; the purchase and sale of non-current assets on credit, for example buying office equipment on credit from a supplier; drawings of goods, when the owner takes trading inventory for personal use; additional capital contributed by the owner in a non-cash form such as a vehicle or equipment; and bad debts, that is, writing off a debtor who has failed to pay. None of these is an ordinary credit purchase or sale of trading goods, so they are recorded in the General Journal rather than a special journal.

For opening entries, the total of all assets is debited and the total of all liabilities and capital is credited so that the accounting equation balances. For the purchase of a non-current asset on credit, the asset account is debited and the creditor (asset supplier) account is credited; conversely, the sale of a non-current asset on credit debits the debtor account and credits the relevant asset account. Drawings of goods debit the Drawings account and credit the Purchases (or Inventory) account, while additional non-cash capital debits the asset account brought in and credits the Capital account. Bad debts debit the Bad Debts account and credit the relevant Debtor account.

After the entry is made in the General Journal, the next step is to post the entry to the ledger. The account debited in the journal is debited in the ledger, and the account credited in the journal is credited in the ledger. When posting, the folio number (the ledger account reference) is written in the General Journal and, conversely, the journal reference (for example JA1) is written in the ledger account. This process ensures that every transaction recorded in the General Journal eventually reaches the correct account for the preparation of the trial balance and the financial statements.

Worked examples

Opening entry for Maju Jaya Enterprise (1 January 2025)

On 1 January 2025, Maju Jaya Enterprise started a new set of books with the following balances: Vehicle RM40,000, Inventory RM8,000, Cash at bank RM12,000, Creditor RM6,000 and Capital (balancing figure) RM54,000.

Entry in the General Journal: Debit Vehicle RM40,000; Debit Inventory RM8,000; Debit Bank RM12,000; Credit Creditor RM6,000; Credit Capital RM54,000. Narrative: (Opening entry to start the business).

Check: total debit RM60,000 = total credit RM60,000. This satisfies the accounting equation Assets = Liabilities + Owner's Equity.

Buying a non-current asset on credit and drawings of goods

On 5 January 2025, the business bought a computer (office equipment) on credit from Bestari Technology Supplier for RM3,500.

General Journal entry: Debit Office Equipment RM3,500; Credit Bestari Technology Supplier RM3,500. Narrative: (Bought office equipment on credit).

On 10 January 2025, the owner took trading goods costing RM600 for family use. General Journal entry: Debit Drawings RM600; Credit Purchases RM600. Narrative: (Drawings of trading goods by the owner).

Additional non-cash capital and bad debts

On 15 January 2025, the owner brought his own motorcycle worth RM5,000 into the business as additional capital. General Journal entry: Debit Vehicle RM5,000; Credit Capital RM5,000. Narrative: (Additional capital in the form of a vehicle).

On 20 January 2025, the debtor Mr Ganesh, who owed RM450, was confirmed unable to pay and his debt was written off. General Journal entry: Debit Bad Debts RM450; Credit Mr Ganesh (Debtor) RM450. Narrative: (Writing off a bad debt).

After all entries, each account is posted to the ledger: for example the Drawings account is debited RM600 and the Purchases account is credited RM600, with the folio cross-referenced.

Practice

On 1 March 2025, Seri Wangi Enterprise started operations with Premises RM80,000, Equipment RM10,000, Bank RM15,000 and Bank Loan RM30,000. Prepare the opening entry in the General Journal and show the value of capital.

Answer: Capital = Total assets - Total liabilities = (RM80,000 + RM10,000 + RM15,000) - RM30,000 = RM105,000 - RM30,000 = RM75,000. General Journal entry: Debit Premises RM80,000; Debit Equipment RM10,000; Debit Bank RM15,000; Credit Bank Loan RM30,000; Credit Capital RM75,000. Narrative: (Opening entry to start the business). Total debit RM105,000 = total credit RM105,000.

On 8 April 2025, Harmoni Grocery sold an old display rack (an asset) on credit to Mr Lim for RM1,200. Record this in the General Journal and state the posting to the ledger.

Answer: This is the sale of a non-current asset on credit, not a sale of trading goods, so it is recorded in the General Journal. Entry: Debit Mr Lim (Debtor) RM1,200; Credit Display Rack RM1,200. Narrative: (Sale of display rack asset on credit). Posting to ledger: Mr Lim's account is debited RM1,200 and the Display Rack account is credited RM1,200, with the folio cross-referenced.

On 12 May 2025, the owner of Indah Sari Enterprise took trading goods costing RM350 for personal use and, on the same day, brought in personal cash of RM4,000 as additional capital. Prepare the General Journal entries.

Answer: Drawings of goods: Debit Drawings RM350; Credit Purchases RM350. Narrative: (Drawings of trading goods by the owner). Additional cash capital is usually recorded in the Cash Book. If it is recorded as a journal entry: Debit Bank/Cash RM4,000; Credit Capital RM4,000. Narrative: (Additional capital in the form of cash). Each account is then posted to the ledger on its debit and credit side.

Explain why bad debts are recorded in the General Journal and show the entry for writing off debtor Mrs Aina's debt of RM520 on 30 June 2025.

Answer: Bad debts are recorded in the General Journal because they are neither a cash transaction nor an ordinary credit purchase or sale of goods; they are an adjustment to write off a debtor who has failed to pay. Entry: Debit Bad Debts RM520; Credit Mrs Aina (Debtor) RM520. Narrative: (Writing off Mrs Aina's bad debt). Posting to ledger: the Bad Debts account is debited RM520 and Mrs Aina's account is credited RM520 to close that debtor's balance.

Exam tips

Key terms

General Journal (Jurnal Am): A book of prime entry for recording transactions unsuitable for the special journals or the cash book.
Opening Entry (Catatan Pembukaan): An entry recording all opening assets, liabilities and capital to start a new set of books.
Folio: A cross-reference column recording the ledger account number to which an entry is posted.
Bad Debts (Hutang Lapuk): The amount written off from a debtor who is confirmed unable to pay, or who has failed to pay.

Source: DSKP KSSM Prinsip Perakaunan Tingkatan 4

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