Which of the following is the primary purpose of using a journal in accounting when you need to locate a transaction that was previously entered?

• A. To calculate depreciation expense
• B. To prepare financial statements directly
• C. To summarize account balances at the end of the period
• D. To provide a chronological record of all transactions for easy reference

Answer: (D)

Verified step by step guidance

1. Understand the purpose of a journal in accounting: A journal is a chronological record of all transactions, which helps in tracking and referencing transactions efficiently.
2. Recognize that the journal is not used to calculate depreciation expense. Depreciation calculations are typically done using specific formulas and recorded in the ledger, not the journal.
3. Note that financial statements are prepared using summarized data from the ledger, not directly from the journal. The journal serves as the initial recording point for transactions.
4. Understand that summarizing account balances at the end of the period is done in the trial balance or ledger, not the journal. The journal is used for detailed transaction entries.
5. Conclude that the primary purpose of the journal is to provide a chronological record of all transactions, making it easier to locate and reference specific transactions when needed.