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Definition and Examples of
General Journal
Explanation: The general journal is the first place where financial transactions are recorded, using the double-entry bookkeeping system. Each transaction includes a date, explanation, and accounts affected.
Example: Recording a new loan in your fitness studio’s journal as a debit to cash and a credit to a loans payable account.
Potential Issues: Errors in the general journal, such as incorrect entries or omission of transactions, can propagate through the entire accounting system, leading to inaccurate financial statements and potential compliance issues.