JOURNAL–The Base of Accounting
What is Journal?
The initial stage of the accounting process is journaled and journalizing. Journal refers to the primary book that records and keeps a track of the accounts and other transactions that are carried out in any business. The book where all the transactions are recorded in a sequential order according to the dates after explaining about the debit and credit transactions is known as Journal.
Journal is originated from the word ‘Jour’ that means day. So, the word journal means a daily book of accounting.
Journal is considered to be the subsidiary book. This is because it becomes easier to prepare the ledger with ease and accuracy, as the transactions are recorded according to the debit or credit.
Features of Journal
In the process of accounting, the initial step is to prepare a journal or journalizing of transactions. Here are some of the following features:
Book of primary entry: Maintaining Journal is the foremost step in the process of accounting. All the transactions related to the business is recorded in the Journal. Because of this, it is known as the basic book of accounts.
Daily record book: After the existence and identification of the transactions of the business are kept in the consecutive direction of the dates. The transactions are recorded on the day co-occurrence in the journal, that is why it is called the daily record book.
Chronological order: all the transactions of the everyday activities are recorded in the journal I the chronological or the sequential order of the dates. That is why the journal book of accounting is also known as the chronological book of accounts.
Use of the dual aspects of the transactions: Going by the double entry bookkeeping system, each and every transaction is recorded in the journal in the dual phases; debiting one account and crediting the other one.
Use of explanation: the journal entry of every transaction has an explanation or the narration because these are helpful to know about it in the future.
Use of different journal books: if the journal is considered in size, nature or the volume of the transactions they are further divided into the different classes. These are: purchase journal, purchase return journal, sales return journal, sales journal, cash disbursement journal, cash receipt journal.
Objectives and Advantages of Journal
- A brief explanation is available in the journal
- Journal is a simple and primary book that records all the transactions
- This is used for recording the daily transactions
- Information can be easily accessed from the different subsidiary journals
- Efficiency and the effectiveness of the accounting process is boosted
- Also, the errors are reduced
Method of Journalizing
According to the principle of accounting, the accounts are classified into 5 groups: income accounts, expenditure accounts, asset account, liability account, and the capital account. Therefore, at the time of recording the transactions, the debt and the credit of it is classified into these groups.
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