Source Documents and the Journal

No transaction should ever be recorded in the books purely on someone's say-so — every entry must be backed by a source document (voucher): a cash memo for a cash sale, a purchase invoice for goods bought on credit, a receipt for cash received, a debit/credit note for a return. These documents are the evidence that a transaction actually happened, for what amount, and with whom.

Once a transaction is verified from its source document, it is first recorded — in the order it occurs, date by date — in the Journal, also called the Book of Prime (Original) Entry, because it is the very first place a transaction is entered into the accounting system, before it is later posted to the Ledger. The process of recording a transaction in the Journal is called journalising, and each individual record is a journal entry.

The standard format of the Journal is:

L.F. (Ledger Folio) is filled in only at the time of posting to the ledger, and records the page number of the ledger account. The Narration — a brief explanation in brackets below every entry — is compulsory, since without it a reader cannot tell what the entry was actually for.