I.   Introductory Provisions

Journals are the twenty-third of thirty-three (33) Administrative Elements of Trust being Books and Registers derived as summary extracts of information from Memoranda and arranged in category order and then day/time order to produce a summary of facts, evidence, quantities and relations for the purpose of accounting and reckoning of the debits and credits of the Trust or Estate or Fund.

By definition, a Journal is a summary of facts transferred and conveyed from the “body” of memoranda determining the “mind” and “intention” of certain transactions in affecting the financial position of a Trust, or Estate or Fund expressed as a statement of two parts being credit and debit and containing the following essential information:

(i) The Unique Journal Entry Number; and

(ii) The date of the original transaction; and

(iii) The Unique Event Number of the transaction as recorded in the Memorandum; and

(iv) The Unique Reference Number associated with the external Party Voucher; and

(v) The titles of the accounts credited and debited; and

(vi) The amount of each credit and debit; and

(vii) A short explanation of the transaction.

The original design of a Journal entry as a statement of fact was in two parts being: (1) The Primary Account as the first account of the statement to which the primary purpose of a transaction event of a memorandum was assigned; and (2) The Off-Set Account against which the credit or debit of the Primary Account was then mirrored to balance. However, under Bankruptcy Accounting since the 16th Century, this purpose was blurred.

Under Venetian Bankruptcy Accounting deliberately introduced in the 16th Century as part of the concept of controlling kingdoms through bankruptcy, beginning with England, the first column of the Journal was changed from Credit to Debit and the second column from Debit to Credit:

(i) The first Column of Bankruptcy Accounting as Debit should formally read “All Credits are owed to the Creditors under bankruptcy and so must be considered Debit”; and

(ii) The second Column of Bankruptcy Accounting as Credit should formally read “All obligations (debits) received under bankruptcy are Credited to the Accounts under Bankruptcy and so must be considered Credit”.

Journal entries in relation to a Trust, or Estate or Fund not in fundruptcy or the proprietary systems of “bankruptcy” share the common historic elements:

(i) The Journal, as a table is primarily divided into two main columns, creditor and debitors; and

(ii) The left most column is always the creditor column, meaning literally “the one who hold the promise of another to pay”; and

(iii) The right most column is always the debitor column, meaning literally “the one under an obligation to pay”; and

(iv) The word “Per” is inserted before the title “creditor” and the word “a” is inserted before the title “debtor” so that each entry in the Journal completes a logical statement of fact equivalent to “Through(this) promise to pay, then (that) obligation to pay is certified”; and

(v) To post a record to a Journal, the memorandum must have a single line diagonally through it, or to the side of it- to denote it is “posted” or at least checked off; and

(vi) Only if the memorandum is “checked” is the record posted in the Journal, leaving double lines to the side of a record in a memorandum or to the side of the event.

The most common types of Journals are Sales, Cash Receipts, Purchases and Cash Payments:

(i) A Sales Journal records transactions that involve sales on credit in chronological (date) order. Credit sales are transactions where the goods are sold and payment is received at a later date. The primary source of Vouchers for a Sales Journal are copies of all Bills or Invoices given to the debtors; and

(ii) A Cash Receipts Journal records transactions that involve payments received with cash in chronological (date) order. Cash receipts are those cash inflows of the business as reflected by deposits into one or more bank accounts. Source documents would probably be receipts and cheque butts. The primary source of Vouchers for a Cash Receipts Journal are copies of all Receipts given to the debtors on proof of payment received; and

(iii) A Purchases Journal records transactions that involve purchases on credit in chronological (date) order. Credit purchases are transactions where goods are purchased and received and payment made at a later date. The primary source of Vouchers for a Purchases Journal are copies of all Bills or Invoices received from creditors; and

(iv) A Cash Payments Journal records transactions that involve expenditures paid with cash in chronological (date) order. Cash payments are those cash outflows of the business as reflected by withdrawals from one or more bank accounts. The primary source of Vouchers for a Cash Payments Journal are copies of all Receipts given by Creditors.