What is special journal in financial accounting system

Special journal or register is used to segregate duties for better internal control in accounting department and to keep special journal entries separate from general ledger.

Segregation of duties in accounting department is based on the function they perform or the responsibility they undertake. Here are the list of some of the special journal maintained in the accounting department;

  • Sales journal
  • Purchase journal
  • Cash receipts
  • Payroll register

Sales journal

Special register for sales used to record company’s credit sales with all the details including;

  • Date
  • Customer name
  • Invoice Amount
  • Taxable value
  • Taxes charged with breakups
  • Goods and services tax number
  • Sales order or purchase order number
  • Description of the transaction

Sample Accounting entry for a sales transaction would be as follows:

Accounts receivableXXX
Sales XXX
Tax payable XXX

In case of more than one tax, payable entry must be posted to respective accounts for the amount collected.

Purchase journal

Purchase register is used when company buys in credit. Its maintain with all the details including;

  • Date of purchase
  • Vendor name
  • Invoice number
  • Amount
  • Quantity
  • Account
  • Description of the purchase

To record credit purchase following accounting entry is posted:

Office suppliesXXX
Accounts payable XXX

Cash receipts

Cash receipt is maintained to record all receipts of money for deposit to the cash account. This specialized journal records all debit to the cash account with all the details including:

  • Date
  • Name
  • Description
  • Amount
  • Accounts receivable

Sample accounting entry posted in cash receipt:

Accounts receivable XXX
Sales XXX
Unearned revenue XXX

Payroll Journal

Special register for payroll is used to record salary for the company. Its also known as salary or payroll register. Salary register maintain all the details of each transactions including;

  • Date
  • Employee Name
  • Amount
  • Gross payroll
  • Head and amount of deductions
  • Withholding tax

To record payroll expenses following accounting entry is posted in the salary register;

Payroll expensesXXX
Withholding tax XXX
Deductions XXX
Cash/Bank XXX

When withholding taxes are transferred to government departments, liabilities created above will set to zero by posting following entry:

Withholding taxXXX
Cash/Bank XXX

In manual accounting system, totals of the specialized journal is posted periodically to the general ledger. Now a days companies are using accounting software in which transactions are automatically posted to the system after updating these special registers. Accountants are not required to manually transfer balances from these special registers to general ledger.

is a fellow member of the Institute of Chartered Accountants of India. He lives in Bhubaneswar, India. He writes about personal finance, income tax, goods and services tax (GST), company law and other topics on finance. Follow him on facebook or instagram or twitter.