Last Modified: April 5, 2025
The general journal contains all the business transactions recorded in chronological order that are carried out by the company within a financial year. To properly record transactions, you must understand the principles of double-entry accounting. If you are not familiar with these principles, there is plenty of documentation available online. Here are some suggestions:
Law Business Essentials: 3.3 Double Entry Bookkeeping | Law Society of Alberta
Double-Entry Accounting: What It Is and How It Works | Coursera (U.S.)
Once you have acquired sufficient knowledge to enter your first transactions, you must get into the habit of verifying their validity. To do this, we recommend that you:
check the account balances in the “Chart of Accounts” regularly so that the amounts reported correspond to your assessment of your business’s financial situation.
perform a bank reconciliation on an ongoing basis, rather than monthly, so that the bank account balances listed in the “Chart of Accounts” always match the values displayed on your financial institution’s website.
compare the “Net Income (Loss)” account balance from the “Capital” or “Equity” component against the balance of one the following account depending on your business’s legal structure:
Sole Proprietorship: 9970 | 7970 | Net Income/Loss Before Extraordinary Items
Partnership: 9999 | 9999 | Net Income/Loss After Extraordinary Items
Corporation: 9999 | 9999 | Net Income/Loss After Tx & Extraordinary Items
A conditional formatting instruction will display these two balance values on a light pink background in the event of an inconsistency between them.
The drop-down lists under the “Debit” and “Credit” columns are populated using a data validation rule that pulls the data stored in the “Chart of Accounts” spreadsheet under the “G” and “H” columns, respectively. These columns are usually hidden as their only purpose is to fill the content of the “Debit” and “Credit” drop-down lists. If you are not familiar with hiding and unhiding columns in Google Sheets, take a look at the “Hide rows or columns” section of the “Freeze, group, hide, or merge rows & columns” Google Docs Editors Help page.
As a general rule, balance sheet items appear under both the “Debit” and “Credit” columns, expense items only under the “Debit” column, and revenue items only under the “Credit” column. The exceptions are:
Amortization items from the balance sheet are limited to the “Credit” column.
For corporations, items with GIFI codes 3700, 3701, and 3702 in the “Retained Earnings/Deficit” section and 9990 from the “Extraordinary Items and Income Taxes” components should only be specified in the “Debit” column.
Predefined items representing totals or subtotals. See Predefined Items.
If, for whatever reason, you decide to keep an unused account in the “Chart of Accounts” but don’t want to have it displayed in one of the drop-down lists, feel free to remove it from the “G” and/or “H” columns.