what is a journal 
a journal is a running record of all of a business s financial transactions it is used to reconcile accounts and is transferred to other accounting records such as the general ledger the journal states the date of a transaction which accounts were affected and the dollar amounts usually in a double entry bookkeeping method understanding a journalfor accounting purposes a journal may be a physical record or a digital document stored as a book a spreadsheet or data entered into accounting software when a transaction is made a bookkeeper records it as a journal entry if the expense or income affects one or more business accounts the journal entry will detail that as well journaling is an essential part of objective record keeping journals are straightforward to review and easily transferred later in the accounting process journals in addition to the general ledger are often reviewed as part of a trade or audit process information that is recorded in a journal may include sales expenses movements of cash inventory and debt the information is best recorded immediately for the sake of accuracy an accurate journal is critical to business planning budgeting and tax preparation using double entry bookkeeping in journalsdouble entry bookkeeping is the most common system of accounting every business transaction is made up of an exchange between two accounts thus every journal entry is recorded with two columns for example if a business owner purchases 1 000 worth of inventory using cash the bookkeeper records two transactions in a journal entry the cash account will show a credit of 1 000 and the inventory account which is a current asset will show a debit of 1 000 using single entry bookkeeping in journalssingle entry bookkeeping is rarely used in accounting and business it is the most basic form of accounting and is set up like a checkbook in that only a single account is used for each journal entry it is a simple running total of cash inflows and cash outflows if for example a business owner purchases 1 000 worth of inventory with cash the single entry system records a 1 000 reduction in cash with the total ending balance below it separately another line indicates that 1 000 has been deducted from the cash account it is possible to separate income and expenses into two columns so a business can track total income and total expenses and not just the aggregate ending balance the journal in investing and tradinga journal is also used by those in the investment finance sector for an individual investor or professional money manager a journal is a comprehensive and detailed record of trades in the investor s accounts and can be used for tax evaluation and auditing purposes traders use journals to keep a chronicle of their trading activities and to learn from past successes and failures over time a trader can sometimes spot the errors emotional decisions or divergence from investing strategy that caused a loss the investor s journal typically has a record of profitable trades unprofitable trades watch lists pre and post market records and notes on why an investment was purchased or sold 