JOURNAL ENTRIES

JOURNALISM THE TRANSACTION

Meaning of journal: the book in which all business transactions are recorded date wise in a systematic manner, is known as journal.

In a journal, all day-to-day business transactions are recorded in a sequence or data wise. The record of any particular transactions in journal is called journal entry. The process of recording is called journalizing.

Journal is also known as book of record or kook of prime entry.

A journal contains the following columns:

Date	Particular	L.F	Debit	Credit

Date, particular, ledger folio, debit side, credit side.

Advantages of journal entry

1. A trader can find out the required information quickly and easily as the transactions are recorded in a chronological order date wise.

2. It helps in the preparation of the final accounts at the end of the year.

Process of journalising

Identifying the affected accounts. First of all, the affected accounts in a transaction should be identified.

Applying the rules of debit and credit. Then the rules of debit and credit should be applied to the affected accounts as per modern approach as below

Assets and expense account are debited on increases and decreases and credited on decreases. Liability, capital and revenue accounts are debited on decreases and credited on increase. On the basis of above rules,

	Date	Particular	l.f	Rs.	Rs.
		Cash a/c Dr. To goods/sales/a/c		20000	20000
Assets a/c increase DR. decrease CR. Liability a/c increase CR. decrease CR. Capital a/c increase CR decrease CR.. Revenue a/c increase CR. decrease CR. Expenses a/c increase DR. decrease CR.