When a firm grows in size, the volume of transactions that must be recorded and processed by the accounting information system also grows. As you now know, all business dealings are documented in the general journal, which is a chronological record of all such dealings. The general journal is where all of the day's transactions get written down. The general journal can become quite large and difficult to navigate as a result of this style of accounting, but it is accurate. Take the case of John Smith, who on June 1 was charged $100 for an item. The following would be recorded in the company's general journal, and subsequent entries would be made for all other transactions that occurred during the period. Scenario: On June 27 Mr. Smith inquires, "How much do I owe?

To identify all the sales transactions involving Mr. Smith, the corporation would have to go through roughly a month's worth of the general journal to get an answer to this query. What's more, if Mr. Smith were to say, "I thought I paid part of that two weeks ago," the business would have to scour the general diary to locate any entries pertaining to payments made to Mr. Smith. The general journal is where all financial activities, such as the payment of bills and the purchase of inventory, are documented in chronological order. This includes the 1,000 credit sales transactions that occurred during the month. As a result, it is difficult to locate the specific bits of information needed for one of our customers, Mr. Smith, if all transactions are recorded to the general journal. A well-designed accounting information system will make use of specialized journals and subsidiary ledgers to make it easier to retrieve specific kinds of data.

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