Journal Abd Ledger Flashcards
Journal:
• The word Journal has been derived from French word “Jour” means day.
• The general journal is part of the accounting record keeping system. When an event occurs that must be recorded, it is called a transaction, and may be recorded in a specialty journal or in the general journal.
• This is also called Book of Original entry.
• This is also called Prime entry or Primary entry or Preliminary entry or First Entry.
• Journalizing: Recording of a transaction in Journal is called “Journalizing” or “Journal Entry”.
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Entry
• Recording a transaction in the appropriate place of the concerned book of account is called Entry.
• Entry may be divided in to two parts
• Recording a transaction from Journal to the concerned account in Ledger is called Ledger Entry. It is also known as Ledger posting
NARRATION
• A short description of each transaction is written under each entry is called a narration.
• A Journal entry is not complete without narration.
Characteristics of Journal
• First step towards Double Entry System.
• A transaction is recorded on the same day that’s why it is called Day Book
• Transactions are recorded chronologically.
• Accounts are used to record the transactions .this makes ledger posting easy. That is why it is also called Assistant to Ledger or Subsidiary Book.
SIMPLE ENTRY
COMPOUND ENTRY
A journal entry having only two accounts is called a simple journal entry. One of the head of account is debited and the other account is credited.
A compound journal entry is an accounting entry in which there is more than one debit, more than one credit, or more than one of both debits and credits.
GENERAL JOURNAL
It is the simplest and the most flexible type of journal. The general journal can be used to record any kind of transactions. For each transaction, it provides date, name of the accounts included, the amount of each debit and credit, references, an explanation of transaction and a column to which each debit and credit was recorded. The debits of a transaction must always equal to the credits.
Ledger:
The book in which all the transactions of a business concern are finally recorded in the concerned accounts in a summarized and classified form, is called ledger.
• Posting:
• Classification:
• Balancing:
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The process of transferring information, debits and credits. from journal to ledger is known as Posting.
The debit and credit aspects of transactions are transferred from journal to concerned accounts in leger is known as classification.
The process of equalizing two sides of an account is known as Balancing.
Debit Balance:
• Credit Balance:
• Zero Balance:
• Balance:
• Trial Balance:
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If the debit side of an account is heavier, its balance is known as Debit balance.
If the credit side of an account is heavier, its balance is known as Credit Balance.
If the two sides of an account are equal, that account will show Zero Balance
The difference between the two sides of an account is its balance.
An informal accounting schedule or statement that lists the ledger account balances at a point in time and compares the total of debit balances with the total of credit balances is called “Trial Balance”.
Debtors Ledger:
Creditors Ledger:
Debtors ledger contains the account of all the customers to whom “goods have been sold on credit.
Creditors ledger contains the accounts of all the suppliers from whom goods have been purchased on credit.
• Journal Folio / Journal Reference:
• Folioing:
The page number of the journal from where the transaction has been posted is mentioned in this column. This will help in locating the entry in the journal easily. It is used in ledger.
The process in which the page number of the ledger is recorded in ledger folio column of journal and page number of the journal is recorded in journal folio column of ledger is known as folioing.
