A transaction log lists each transaction with its date, source document, amount, accounts affected and journal entry. Its purpose is to let someone trace every figure in your ledger back to proof.
This lesson is part of SPM Accounting. It follows planning an original accounting project, and the accounts use the debit and credit rules practised in the debit-credit transaction trainer.
What columns does the log need?
Use one row per transaction and these columns:
- Date of the transaction.
- Document type and number, such as Invoice 004.
- Description in a short phrase.
- Amount in RM.
- Debit account.
- Credit account.
- Where the document is kept, such as folder or file name.
Worked example: five days at an invented stall
| Date | Document | Description | RM | Debit | Credit | Filed |
|---|---|---|---|---|---|---|
| 2 Mar | Invoice 001 | Rice and ingredients bought | 450 | Purchases | Cash | Folder A |
| 3 Mar | Receipt 001 | Packets sold for cash | 620 | Cash | Sales | Folder A |
| 4 Mar | Cash voucher 001 | Stall rent paid | 60 | Rent | Cash | Folder A |
| 5 Mar | Invoice 002 | Sold to a teacher on credit | 90 | Debtor | Sales | Folder B |
| 6 Mar | Receipt 002 | Teacher paid the credit sale | 90 | Cash | Debtor | Folder B |
The log shows sales of RM620 in cash and RM90 on credit, so the Sales account in the ledger should show RM710.
How do I check the log against the ledger?
Add the log amounts by account, then compare with the ledger balance. Sales in the log are 620 + 90 = 710, and the Sales ledger should show RM710.
A mismatch means a missing row or a posting slip. A transposition such as 620 entered as 260 makes the difference divisible by 9, which is a quick clue.
The mistake of logging from memory
Writing the log at the end of the month leads to guessed amounts and lost documents. One missing invoice can leave an unexplained number in the statements.
The habit is to log each entry when you post it. If you cannot find the proof for a row, mark it, and deal with it that day.
Check yourself
The log lists sales of RM1 240, RM860 and RM530. The ledger shows RM2 360. Is there a difference, and what might cause it?
Answer
Log total = 1 240 + 860 + 530 = RM2 630. The ledger is RM2 360, so the difference is RM270.
The difference is divisible by 9 (270 ÷ 9 = 30), which suggests a transposition such as 2 630 written as 2 360. Compare each posting with its document to find it.
What to study next
Next, see how to test spreadsheet work in checking spreadsheet formulas against accounting logic. Practise the ideas with the coursework support practice set.
If you want a teacher to practise logging on a different scenario, see online one-to-one Accounting tuition.