How Many Types There In Which A Journal Can Be Divided?

For a large business concern, one journal is not sufficient to record all business transactions and there should be several journals (subsidiary books or special journals) and several clerks to record the transactions. But how many journals a business should have?

Well as we know different types of transactions take place in a business concern. Some transactions take place repeatedly (hundreds to thousands times in a year) and some transactions take place once or twice in a year. Obviously, it is not logical to provide a separate journal for transactions which rarely take place.

For this purpose different groups of transactions are made and a separate book is provided for each group. Each group is consisted of similar types of transactions:
Journal is mainly divided into two:
A. Special Journal
B. General Journal
The subdivisions are described here below:
A. Special Journal
By special journal we mean a journal in which transactions relating to a certain special group are recorded. Special journal is again subdivided into eight groups.
1) Purchases Book or Purchases Journals
2) Sales Book or Sales Journal
3) Purchases Returns Book or Purchases Returns Journal
4) Sales Returns Book or Sales Returns Journal
5) Bills Receivable Book
6) Bills Payable Book
7) Cash Book or Cash Journal
8) Petty Cash Book
B. General Journal

The transactions which do not fall within the scope of above mentioned books, are recorded in this Journal e.g. Purchase of an asset or credit, depreciation on assets, expenses payable, bad debts etc. It is also known as Journal Proper, Modern Journal or Principal Journal.

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