Since there are so many different types of business

Since there are so many different types of business transactions, accountants
usually categorize them and record them in separate journal to help keep
track of business events. For instance, cash was used to purchase this vehicle,
so this transaction would most likely be recorded in the cash disbursements
journal. There are numerous other journals like the sales journal, purchases
journal, and accounts receivable journal.
Example

We are following Paul around for the first year as he starts his guitar store
called Paul’s Guitar Shop, Inc. Here are the events that take place.
Entry #1 — Paul forms the corporation by purchasing 10,000 shares of $1 par
stock.
Entry #2 — Paul finds a nice retail storefront in the local mall and signs a lease
for $500 a month.
Entry #3 — PGS takes out a bank loan to renovate the new store location for
$100,000 and agrees to pay $1,000 a month. He spends all of the money on
improving and updating the store’s fixtures and looks.
Entry #4 — PGS purchases $50,000 worth of inventory to sell to customers on
account with its vendors. He agrees to pay $1,000 a month.

Entry #5 — PGS’s first rent payment is due.
Entry #6 — PGS has a grand opening and makes it first sale. It sells a guitar
for $500 that cost $100.
Entry #7 — PGS sells another guitar to a customer on account for $300. The
cost of this guitar was $100.

Entry #8 — PGS pays electric bill for $200.
Entry #9 — PGS purchases supplies to use around the store.
Entry #10 — Paul is getting so busy that he decides to hire an employee for
$500 a week. Pay makes his first payroll payment.

Entry #11 — PGS’s first vendor inventory payment is due of $1,000.
Entry #12 — Paul starts giving guitar lessons and receives $2,000 in lesson
income.
Entry #13 — PGS’s first bank loan payment is due.

Entry #14 — PGS has more cash sales of $25,000 with cost of goods of
$10,000.
Entry #15 — In lieu of paying himself, Paul decides to declare a $1,000
dividend for the year.
Now that these transactions are recorded in their journals, they must be
posted to the T-accounts or ledger accounts in the next step of the accounting
cycle .
Here is an additional list of the most common business transactions and the
journal entry examples to go with them.
 Sale Entry
 Depreciation Expense Entry
 Accumulated Depreciation Entry
 Accrued Expense Entry

Common Journal Entry Questions
What is a manual Journal Entry?
Manual journal entries were used before modern, computerized accounting
systems were invented. The entries above would be manually written in a
journal throughout the year as business transactions occurred. These entries
would then be totaled at the end of the period and transferred to the ledger.
Today, accounting systems do this automatically with computer systems.
What is a general journal entry in accounting?