In short, transactions are first recorded in journals. From the journals the amounts are posted to the specified accounts in the general ledger.

Let’s illustrate the difference between entries to the general journal versus general ledger with the depreciation associated with a company’s equipment.

The depreciation on equipment is first recorded in the general journal.  A journal lists transactions in order by date and is defined as the book of original entry. To record depreciation on equipment in the amount of $10,000, the general journal will show a date, such as December 31, a debit to Depreciation Expense for $10,000 and a credit to Accumulated Depreciation for $10,000.

The amounts in the general journal are then posted to the specified accounts, which are contained in the general ledger. In our example, the account Depreciation Expense will be debited as of December 31 for $10,000 and the account Accumulated Depreciation will be credited as of December 31 for $10,000.

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About the Author: Harold Averkamp (CPA) has worked as an accountant, consultant, and university accounting instructor for more than 25 years. He is the creator and author of all the content found on AccountingCoach.com. You can read 1,500 testimonials praising his ability to explain accounting in a way that anybody can understand.

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