name five common types of transactions will be recorded in a general journal.
Name five common types of transactions that will be recorded in a general journal
Answer:
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Cash Sales: Cash sales transactions involve selling goods or services in exchange for immediate payment in cash. These transactions are recorded in the general journal to document the revenue generated.
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Accounts Payable: When a company purchases goods or receives services on credit, an accounts payable transaction occurs. This transaction reflects a short-term liability for the business, and it is recorded in the general journal to track the amount owed to suppliers or vendors.
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Salaries and Wages: Payments made to employees for their work are recorded in the general journal under salaries and wages. These transactions typically occur either bi-weekly or monthly and represent expenses for the business.
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Inventory Purchases: When a company buys goods or raw materials for resale, inventory purchases transactions are recorded in the general journal. These entries help in tracking the cost of goods sold and the value of inventory on hand.
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Depreciation: Depreciation transactions involve allocating the cost of long-term assets over their useful life. By recording depreciation expenses in the general journal, a business can reflect the gradual reduction in the value of its assets over time, which impacts the company’s profitability and financial position.