Special journals are designed as a simple way to record the most frequently occurring transactions. There are four types of Special Journals that are frequently used by merchandising businesses: Sales journals, Cash receipts journals, Purchases journals, and Cash payments journals.

Sales journals record all sales a business makes to customers on account, which means no money changes hands between the company and the customer at the time of the sale. Cash receipts journals record cash sales, customer payments on account, or interest and dividend payments.

To provide this information, companies use a subsidiary ledger to keep track of individual balances. A subsidiary ledger is a group of accounts with a common characteristic, e.g., all are customer accounts, that is, all are accounts receivable. The subsidiary ledger facilitates the recording process by freeing the general ledger from the details of individual balances. Thus, a typical merchandising enterprise has subsidiary ledgers containing accounts with customers (accounts receivable or customers' ledger) and creditors (accounts payable or creditors' ledger). The enterprise maintains an account in the general ledger that summarizes the details in the accounts receivable and accounts payable ledgers. This summary account in the general ledger is called a control account, because the summary account controls the subsidiary ledger. The general ledger control account balance must equal the composite balance of the individual accounts in the subsidiary ledger.

Consider some examples of special accounting journals and some transactions they may contain: Sales journals record all sales a business makes to customers on account, which means no money changes hands between the company and the customer at the time of the sale. Cash receipts journals record cash sales, customer payments on account, or interest and dividend payments. Cash disbursement journals show any payment the business makes using a form of cash. These entries include purchases transactions or payments on debt.

> What are two or three types of special journals? --A business constantly needs detailed information about its dealings with individual customers and creditors. Imagine a business with several thousand charge (credit) customers and the transactions with these customers are shown in only one account, Accounts Receivable, in the general ledger. It would be virtually impossible to determine the balance owed by an individual customer at a specific time. Similarly, details of transactions affecting a single creditor are needed from time to time, and a single Accounts Payable account in the general ledger cannot make this information available. --Consider some examples of special accounting journals and some transactions they may contain: --Sales journals record all sales a business makes to customers on account, which means no money changes hands between the company and the customer at the time of the sale. --Cash receipts journals record cash sales, customer payments on account, or interest and dividend payments. --Cash disbursement journals show any payment the business makes using a form of cash. These entries include purchases transactions or payments on debt. --Purchases journals show purchases a company makes on account. --Payroll journals record all payroll transactions, including gross wages, taxes withheld, and other deductions, such as health insurance paid by the employee, leading to net pay, which is the amount shown on the employee’s check. --While an accrual-based business will have cash journals, a cash-based business won’t have a sales or purchases journal as a cash-based business only recognizes transactions when cash changes hands.

A business constantly needs detailed information about its dealings with individual customers and creditors. Imagine a business with several thousand charge (credit) customers and the transactions with these customers are shown in only one account, Accounts Receivable, in the general ledger. It would be virtually impossible to determine the balance owed by an individual customer at a specific time. Similarly, details of transactions affecting a single creditor are needed from time to time, and a single Accounts Payable account in the general ledger cannot make this information available. Expansion of the Ledger - Subsidiary Ledgers Expansion of the Journal Special Journals Exercises EXPANSION OF THE LEDGER - SUBSIDIARY LEDGERS To provide this information, companies use a subsidiary ledger to keep track of individual balances. A subsidiary ledger is a group of accounts with a common characteristic, e.g., all are customer accounts, that is, all are accounts receivable. The subsidiary ledger facilitates the recording process by freeing the general ledger from the details of individual balances. Thus, a typical merchandising enterprise has subsidiary ledgers containing accounts with customers (accounts receivable or customers' ledger) and creditors (accounts payable or creditors' ledger). The enterprise maintains an account in the general ledger that summarizes the details in the accounts receivable and accounts payable ledgers. This summary account in the general ledger is called a control account, because the summary account controls the subsidiary ledger. The general ledger control account balance must equal the composite balance of the individual accounts in the subsidiary ledger. As indicated, two common subsidiary ledgers are: (1) the accounts receivable ledger or customers' ledger, controlled by the general ledger account, Accounts Receivable; and (2) the accounts payable ledger or creditors' ledger, controlled by the general ledger account, Accounts Payable. In subsidiary ledgers, the individual accounts are usually arranged in alphabetical order.

Sales journals record all sales a business makes to customers on account, which means no money changes hands between the company and the customer at the time of the sale. Cash receipts journals record cash sales, customer payments on account, or interest and dividend payments. Cash disbursement journals show any payment the business makes using a form of cash. These entries include purchases transactions or payments on debt.

Dear Friend, as far as your query is concerned that What are two or three types of special journals? Let me informed that If a company has many similar transactions, it uses special accounting journals. Consider some examples of special accounting journals and some transactions they may contain: Sales journals record all sales a business makes to customers on account, which means no money changes hands between the company and the customer at the time of the sale. Cash receipts journals record cash sales, customer payments on account, or interest and dividend payments. Cash disbursement journals show any payment the business makes using a form of cash. These entries include purchases transactions or payments on debt. Purchases journals show purchases a company makes on account. Payroll journals record all payroll transactions, including gross wages, taxes withheld, and other deductions, such as health insurance paid by the employee, leading to net pay, which is the amount shown on the employee’s check. While an accrual-based business will have cash journals, a cash-based business won’t have a sales or purchases journal as a cash-based business only recognizes transactions when cash changes hands. Hope answer was helpful to you Regards, Arjun Pratap Singh