Special Journals in Accounting: The 5 Journals & Subsidiary Ledgers (CPA FAR)

Special journals in accounting are books of original entry that record one specific type of high-volume transaction — such as credit sales or cash receipts — so that similar entries can be grouped and posted as column totals instead of being journalized one at a time in the general journal. The five journals used in a manual accounting system are the sales journal, cash receipts journal, purchases journal, cash disbursements journal, and the general journal. This lesson from Professor Farhat walks through each one, plus how subsidiary ledgers tie back to their general ledger control accounts — a core Financial Accounting (FAR) topic for CPA candidates.

Watch: Special Journals in Accounting

What Are Special Journals in Accounting?

A special journal records transactions of a single kind so that repetitive entries can be batched and posted efficiently. Instead of writing a separate general-journal entry for every credit sale, a business lists each sale on one line of the sales journal and posts only the column totals to the general ledger at period end. Using special journals in accounting reduces posting effort, lowers the risk of error, and allows work to be divided among staff. As transaction volume grows, this efficiency becomes essential.

The Five Journals at a Glance

Journal	Records	Typical Posting
Sales Journal	Sales on account (credit sales) only	Dr Accounts Receivable / Cr Sales (and Dr COGS / Cr Inventory under perpetual)
Cash Receipts Journal	All transactions that bring in cash	Always a debit to Cash
Purchases Journal	Purchases on account (credit purchases)	Dr Purchases/Inventory / Cr Accounts Payable
Cash Disbursements Journal	All transactions that pay out cash	Always a credit to Cash
General Journal	Transactions that fit no special journal	Adjusting entries, returns, depreciation, etc.

The Sales Journal

The sales journal records credit sales only — cash sales go in the cash receipts journal. Each line captures the date, customer name, invoice number, and amount. Under a perpetual inventory system, each sale also records the cost side.

Worked example. A company sells merchandise on account for $1,000; the merchandise cost $600.

Dr  Accounts Receivable ....... 1,000
      Cr  Sales Revenue .............. 1,000

Dr  Cost of Goods Sold ........   600
      Cr  Inventory ..................   600

At period end, the total of the Accounts Receivable column is posted to the Accounts Receivable control account, and each individual customer amount is posted to that customer’s account in the accounts receivable subsidiary ledger.

The Cash Receipts Journal

The cash receipts journal records every transaction that brings cash in, so every entry includes a debit to Cash. Common sources include collections from credit customers, cash sales, and other inflows such as interest or the sale of assets. A collection from a customer who also takes a sales discount is recorded as follows:

Dr  Cash ...................   980
Dr  Sales Discounts .......    20
      Cr  Accounts Receivable ...  1,000

The example above reflects credit terms of 2/10, n/30 (a 2% discount if paid within 10 days) applied to a $1,000 balance.

The Purchases Journal

The purchases journal records purchases on account. Under a perpetual system the debit is to Inventory; under a periodic system the debit is to Purchases. The credit is always to Accounts Payable.

Dr  Inventory (or Purchases) ... 2,000
      Cr  Accounts Payable ........... 2,000

The Accounts Payable column total posts to the payable control account, while individual amounts post to each supplier’s account in the accounts payable subsidiary ledger.

The Cash Disbursements Journal

The cash disbursements journal records every transaction that pays cash out, so every entry includes a credit to Cash. Paying a supplier and taking a purchase discount looks like this:

Dr  Accounts Payable ....... 2,000
      Cr  Cash ...................  1,960
      Cr  Inventory (or Purchase Discounts) ...  40

The General Journal

The general journal handles anything that does not fit a special journal: sales returns and allowances, purchase returns, adjusting entries, depreciation, and correcting entries. The general journal complements special journals in accounting by recording entries that fall outside their categories.

Subsidiary Ledgers and Control Accounts

A subsidiary ledger holds an individual account for each customer or supplier. The two most common are the accounts receivable subsidiary ledger and the accounts payable subsidiary ledger. The key control rule is:

The sum of all individual balances in a subsidiary ledger must equal the balance of its related general ledger control account.

If the total of every customer account in the accounts receivable subsidiary ledger does not reconcile with the Accounts Receivable control account, there is a posting error to investigate. This reconciliation is a fundamental internal-control checkpoint tested on the CPA FAR exam. To learn more about the double-entry framework that underlies these control accounts, see this overview of general ledgers in double-entry accounting.

How to Choose Special Journals in Accounting

To choose among special journals in accounting, begin with the transaction itself. Ask whether cash changes hands now, whether the business is selling or buying on credit, and whether the entry fits an established journal. This sequence helps you distinguish the original transaction from a later collection or payment.

Start with cash. A customer who pays immediately creates a cash receipt. A payment to a supplier creates a cash disbursement. The account on the other side of the entry explains why cash moved, but the direction of the cash flow determines which of these two journals applies.

Next, check credit transactions. A merchandise sale on account belongs in the sales journal. A merchandise purchase on account belongs in the purchases journal. Read the journal headings carefully: some businesses design a purchases journal for merchandise alone, while others include columns for additional credit purchases.

Use the general journal when needed. An adjusting entry for depreciation does not represent a cash receipt, cash payment, credit sale, or credit purchase of merchandise. It belongs in the general journal in the system described here. The same approach applies when another transaction does not match an available special journal.

Remember that the five journal types in this lesson include four special journals plus the general journal. For another explanation of this classification, see OpenStax on journalizing transactions using special journals.

Practice: Follow a Credit Sale Through the Ledgers

This original practice example connects special journals in accounting with the customer records behind a control account. Assume a company begins the month with no accounts receivable. It sells $1,500 of merchandise on account to Customer A and $900 on account to Customer B. Ignore sales taxes, discounts, returns, and inventory cost entries for this receivables-only exercise.

Step 1: Record the sales. Enter both credit sales in the sales journal. The Accounts Receivable column totals $2,400, and the Sales Revenue column totals the same amount. In the customer subsidiary ledger, Customer A owes $1,500 and Customer B owes $900. These individual balances explain the total receivable.

Step 2: Record a collection. Customer A later pays $1,000. Record the collection in the cash receipts journal as a debit to Cash and a credit to Accounts Receivable. Reduce Customer A’s subsidiary balance to $500. Customer B still owes $900. Do not record another sale when the cash arrives: the revenue was already recorded at the time of the credit sale.

Step 3: Reconcile the balances. After the relevant journal totals have been posted, the Accounts Receivable control account shows $2,400 of sales less $1,000 of collections, or $1,400. The customer ledger also totals $1,400: $500 for Customer A plus $900 for Customer B. The two totals agree.

Step 4: Investigate a mismatch. If the control account shows $1,400 but the customer ledger totals $2,400, check whether the $1,000 collection reached Customer A’s account. Use the source document and posting references to trace the entry before correcting it. A difference identifies a need for investigation; it does not, by itself, prove which record is wrong.

When practicing special journals in accounting, explain both where the transaction is first recorded and which customer or supplier balance changes. Then check the combined balances against the control account. For further practice with this relationship, review OpenStax on preparing a subsidiary ledger.

Video Timeline

• 0:39 — Sales journal: credit sales, receivables, and COGS
• 7:32 — Cash receipts journal: all cash inflows
• 13:05 — Purchases journal: purchases on account
• 15:35 — Cash disbursements journal: cash payments
• 18:00 — General journal: transactions not in special journals

Special Journals in Accounting: Frequently Asked Questions

What is a special journal?

A special journal records transactions of a single type, such as credit sales or cash receipts, so similar entries can be batched and posted efficiently instead of being recorded individually in the general journal.

What are the five accounting journals?

The five journals are the sales journal, cash receipts journal, purchases journal, cash disbursements journal, and the general journal for transactions that do not fit a special journal.

What is a subsidiary ledger?

A subsidiary ledger holds individual accounts for each customer or supplier. The total of all subledger balances must reconcile with the related general ledger control account.

What goes in the cash receipts journal?

The cash receipts journal records every transaction that brings in cash, including collections from credit customers, cash sales, and other inflows, always with a debit to cash.

Why do companies use special journals?

Special journals in accounting improve efficiency by grouping similar transactions and posting column totals, which speeds up processing as transaction volume grows.

Keep Learning

New to the fundamentals? Start with What Is Accounting? An Introduction to Accounting. Ready to prepare for the exam? Explore the full course library and interactive practice at Farhat Lectures, or review the official AICPA Uniform CPA Examination Blueprints to see how Financial Accounting topics are tested.