Primary and Secondary Uses of Journal in accounting

Primary Uses of Journal

In practice all transactions are first entered in the journal in the order in which they occur and from the journal they are posted to the respective accounts in the ledger. But this would involved a tremendous amount of work because each transaction requires a separate debit to the receiving account and a credit to the giving account to bring into record the two fold aspect of each transaction. A considerable saving of clerical labour's effort can be brought about if transactions of similar nature are recorded in separate journals so as to permit the sub-divisions of the journals. This would facilitate not only the division of the journal but it would also make easier the job of posting in the ledger, as the postings can then be made in the form of totals being transactions of similar nature.

These sub-divisions of the journals into various books recording transactions of similar nature are called subsidiary books. These subsidiary books are also known as books of original entry because transactions are first recorded in these books to be subsequently transferred to their respective accounts in the ledger.

In the last unit, we mentioned the types of subsidiary books and their uses. For more explanation, the various books in which the journal may be subdivided into are as follows:

1.  Cash- book or cash journal. This book can be used to record cash receipt and payments Note that the cash book is a journal as well as a ledger. 
2. Purchases day book or bought book or invoice book. It can be used for recording credit purchases of goods. 
3.  Sales day book. This can be used for recording all goods sold on credit 
4.  Purchases Returns book or Returns outwards book for recording all purchases returned to creditors. 
5. Sales Returns book or Return inwards book for recording all sales returned by customers. 
6. Bills receivable book used to keep a record of bills received from customers. 
7.  Bills payable book used to keep a record of bill payable to creditors. 
8. Journal proper used to keep a record of those transactions for which there is no separate book. 

Secondary Uses of Journal

In modern practice the journal proper is used only for recording transactions which cannot conveniently be passed through other books or original entry already discussed under the primary uses of journal. These include:

1. Opening entries 
2. Closing entries 
3. Entries relating to rectification of errors i.e. correction of errors.
4. Adjustment in account 
5.  Purchase and sales of fixed assets on credit
6. Transfer entries {transfer from one account to another}. e.t.c. 

Opening Entries 

If a trader commences business with various assets and perhaps liabilities or whether, for any reason a new set of books is being opened, the opening balances are usually journalized. The capital of the business is the excess of Assets over liabilities of such business at any date. If the business has no liabilities then the value of all the assets will be the capital of the business.
After ascertaining the capital in this way, Journal entries are made to show these assets, liabilities and capital at that date before the item are posted to the ledger.