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CHAPT E R 2 Introduction to Transaction Processing 47

FI G U R E
2-6 SALES JOURNAL

Debit
Date Customer Invoice Acct. Post Credit
Num. Num. Acct . Rec. #102 Sales #401
Sept. 1 Hewitt Co. 4523 1120 3300 3300
15 Acme Drilling 8821 1298 6825 6825
Oct. 3 Buell Corp. 22987 1030 4000 4000
10 Check Ltd. 66734 1110 8500 8500

REGISTER. The term register is often used to denote certain types of special journals. For example,
the payroll journal is often called the payroll register. We also use the term register, however, to denote a
log. For example, a receiving register is a log of all receipts of raw materials or merchandise ordered from
vendors. Similarly, a shipping register is a log that records all shipments to customers.

GENERAL JOURNALS. Firms use the general journal to record nonrecurring, infrequent, and dissimi-
lar transactions. For example, we usually record periodic depreciation and closing entries in the general
journal. Figure 2-7 shows one page from a general journal. Note that the columns are nonspecific, allow-
ing any type of transaction to be recorded. The entries are recorded chronologically.
As a practical matter, most organizations have replaced their general journal with a journal voucher system.
A journal voucher is actually a special source document that contains a single journal entry specifying the gen-
eral ledger accounts that are affected. Journal vouchers are used to record summaries of routine transactions,
nonroutine transactions, adjusting entries, and closing entries. The total of journal vouchers processed is equiva-
lent to the general journal. Subsequent chapters discuss the use of this technique in transaction processing.
Ledgers

A ledger is a book of accounts that reflects the financial effects of the firm’s transactions after they are
posted from the various journals. Whereas journals show the chronological effect of business activity,
ledgers show activity by account type. A ledger indicates the increases, decreases, and current balance of
each account. Organizations use this information to prepare financial statements, support daily operations,
and prepare internal reports. Figure 2-8 shows the flow of financial information from the source docu-
ments to the journal and into the ledgers.
There are two basic types of ledgers: (1) general ledgers, which contain the firm’s account information
in the form of highly summarized control accounts, and (2) subsidiary ledgers, which contain the details
of the individual accounts that constitute a particular control account. 1

1 Not all control accounts in the general ledger have corresponding subsidiary accounts. Accounts such as sales and cash typically
have no supporting details in the form of a subsidiary ledger.