What is a Journal?


JOURNAL

What is a Journal?

 

It is the book of prime entry or the book of original entry where the financial transaction are recorded in the chronological order as and when they take place.

 

                   A transaction is recorded first of all in the journal. So the journal is called the book of original entry. A transaction is recorded on the same day it takes place. So, journal is called Day Book. Transactions are recorded chronologically, So, journal is called chronological book

 

Definition: A journal or book of original entry is the place where journal entries are recorded before they are posted to the ledger accounts. A journal is a record of all the transactions a company has recorded.

 

A journal stores a complete record of every business transaction the company makes.

 

 

This usually includes the transaction date, transaction description, accounts that were affected

 

§  Date: In this column, we mention the date of the transaction along with the month in which the transaction took place. The year is indicated at the top only once and not repeated with every date.

§  Particulars: This column indicates the accounts which are affected, i.e. debited or credited, by the transaction. In the very first line, we write the account which is debited and then in the extreme right of the same line and column we write Dr. which indicates Debit.

In the next line, after leaving some space, we write the account which is credited starting with the preposition ‘to’.

A small narration for the respective transaction is given in the third line which explains the entry in the brackets, and it starts with the word ‘being’.

§  L.F. or Ledger Folio: As we know that transactions entered in the journal are then taken to the Ledger, in their respective accounts. In this column, the page number concerning the entry in the ledger is mentioned.

§  Dr. Amount:The amount to be debited for a particular entry is written in the same line, where the debited account is indicated.

§  Cr. Amount: The amount to be credited for a particular entry is written in the same line, where the concerned credited account is written

Write Journal Entries for the transactions


   DATE

PARTICULARS

RS

10th April

Commenced business with a capital of                                                          

1,00,000

11th April

Purchased goods from Veeru

20,000

13th April

Purchased Goods for Cash

15,000

14th April

Purchased Goods from Abhiram for cash

9,000

19th April

Sold goods for cash

20,000

20th April

Sold goods to Utsav for cash

6,000

21st April

Sold goods to Pranav on credit

17,000

22nd April

Returned goods to Veeru

3,000

25th April

Goods taken by the proprietor for personal use

1,000

26th April

Bought Land for

50,000

27th April

Purchased machinery for cash

45,000

28th April

Cash sales

15,000

29th April

Cash purchases

22,000

Journal in the books of Mr. Nirmal for the period from 1st to 30th April

Date

Particulars

L/F

Amount
(Dr)

Amount
(Cr)

April 10th

Cash a/c

To Capital a/c

Dr

–
–

1,00,000


1,00,000

[Being the amount received from Mr. Nirmal in cash, the proprietor as his capital contribution

11th

Goods/Stock a/c

To Veeru a/c

Dr

–
–

20,000


20,000

[Being the value of stock purchased from Mr. Veeru on credit

13th

Goods/Stock a/c

To Cash a/c

Dr

–
–

15,000


15,000

[Being the value of stock purchased for cash from M/s

14th

Goods/Stock a/c

To Cash a/c

Dr

–
–

9,000


9,000

[Being the value of stock purchased for cash from Mr. Abhiram

19th

Cash a/c

To Goods/Stock a/c

Dr

–
–

20,000


20,000

 

 

[Being the value of goods sold for cash

20th

Cash a/c

To Goods/Stock a/c

Dr

–
–

6,000


6,000

[Being the value of stock sold to Mr. Utsav for cash

21st

Pranav a/c

To Goods/Stock a/c

Dr

–
–

17,000


17,000

[Being the value of stock sold to Mr. Pranav on credit

22nd

Veeru a/c

To Goods/Stock a/c

Dr

–
–

3,000


3,000

[Being the value of goods returned to Mr. Veeru

25rd

Drawings a/c

To Goods/Stock a/c

Dr

–
–

1,000


1,000

[Being the value of stock taken by the proprietor

26th

Land a/c

To Cash a/c

Dr

–
–

50,000


50,000

[Being the amount paid for land purchased

27th

Machinery a/c

To Cash a/c

Dr

–
–

45,000


45,000

[Being the amount paid for the purchase of machinery

29th

Cash a/c

To Goods/Stock a/c

Dr

–
–

15,000


15,000

 

 

[Being the value of stock sold for cash

29th

Goods/Stock a/c

To Cash a/c

Dr

–
–

22,000


22,000

[Being the value of stock purchased for cash

 



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