journal is a record of financial transactions in order by date. A journal is often defined as the book of original entry. The definition was more appropriate when transactions were written in a journal prior to manually posting them to the accounts in the general ledger or subsidiary ledger. Manual systems usually had a variety of journals such as a sales journal, purchases journal, cash receipts journal, cash disbursements journal, and a general journal..The process of recording transactions in a journal is termed as “Journalising”.
|Date||particulars||L.F||Debit Rs.||Credit Rs.|
Explanation of journal items
Date : The date of the transaction is recorded here.
Particulars : In particulars column the name of accounts which the transaction affects are entered.The symbol ‘Dr’ is written at the right end the particular column on the same line of the account debited.The name of the account to be credited is entered on the next line with a prefix ‘To’.
Ledger Folio(L.F) : In ledger folio column the page number in the ledger to which the entry is finally transferred or posted in entered.
Dr(amount) : The debit amount is recorded in the amount ‘Dr’ column.
Cr(amount) : The credit amount is recorded in the amount ‘Cr’ column.
Advantages of journal
1. It provides date wise record for all business transactions.
2. It provides an Explanation of the transactions.
3. It helps to locate and prevent errors.
4. It shows all the necessary information regarding a transaction.
5. Time saving concept.
6. Savings in book-keeping expenses.
7. Future references.