Q8: What are specialised journals?
Firms do not usually simply enter the transactions happening to them each day into a long undifferentiated list called a journal. Most firms will enter a lot of their transactions into specialised journals rather than into one general journal. A key aspect of a firm we are usually interested in, is the cash coming into and cash going out of a firm. However, firms are fundamentally about adding value to various parties, which is more than simply acting as a conduit for cash. Some commonly-used specialised journals include a sales journal, purchases journal, cash receipts journal and cash payments journal. A firm has a strong interest in its sales. Sales made on credit (that is, sales which are paid for by customers after receiving the goods or services) are often recorded in a sales journal. For examples, sales made for cash (and when cash is received from sales originally made on credit) are then often recorded in a Cash receipts journal.