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The word ‘Journal’ has been derived from the French word ‘JOUR’ meaning daily records. Journal is a book of prime record for small firms. Big concerns prepare Cash Book, Purchases Book, Sales Book and other subsidiary books in addition to Journal proper. Small firms record their business transactions in Journal and post them to the concerned ledger accounts. Big concerns record their business transactions in subsidiary books and Journal and post them from these prime books t~ respective ledger accounts.

According to Professor Cartor, “The Journal is originally used, as a book of prime entry in which transactions are copied in order of date from a memo random or waste book. The entries as they are copied are classified into debits and credits, so as to facilitate them being correctly posted, afterwards in the ledger’.

Business transactions of financial nature are studied and classified as assets, liabilities, capital, revenues and expenses and accordingly debited or credited in the Journal. Accounts are debited or credited according to rules of debit and credit applicable to the specific account. Journal entries are passed on the following format:

Format of Journal

            The journal is sub-divided into five columns. These columns as per above format are Date, Particulars, Ledger Folio, Amount (Debit), Amount (Credit) and narration. These columns show the following information: 

1. Date

This is the first column of the Journal. It records the date of the transaction with its month and year. We need not repeat the year against every entry because the year is almost the same. In the same way, months should also not be repeated but the date should change because the dates of transactions ordinarily differ. The sequence of the dates and months should be strictly maintained i.e., transaction taking place on January I, :wos will be recorded in Journal first and afterward the transaction taking place on January 2, 2005. In the same way, transaction for the month of January, 2005 will be recorded before the transactions of February,2005. Date should be recorded in the Journal as under :

2. Particulars

This column is used for recording the details of the business transaction. As we know every t:J.·ansacnon has got double effect and there are always two or more accounts to be debited and credited. We write the name of account to be debited and also write ‘Dr’ against the account. Account to be credited is written below the account to be debited. The credit account starts after leaving certain space and we do not write ‘Cr’ against this account. After the Journal Entry ‘Narration’ is written, just to explain the journal entry. If furniture is purchased, furniture account will be debited, because the transaction will increase the value of furniture and

cash account will be credited because cash will decrease due to the payment for furniture. This transaction will be recorded in the Particulars column of the journal as under:

The important feature of the above Journal entry are using ‘Dr’ against Furniture Ale, leaving space while writing Cash A/c and not using ‘Cr’ against Cash A/c. Narration is preceded by the words ‘Being’, ‘For’ can also be used instead of ‘Being’. Presenting Journal entry as above is the convention of Accounting. It should be honored to establish norms of the subject and to bring uniformity in the presentation.

3. Ledger Folio (LF.)

Journal is the original record of the business transactions. On the basis of journal entries posting in the ledger accounts are made. It shows that journal and ledger are inter-related and the ledger posting is based upon Journal. It is, therefore, necessary that there should be certain reference as regards the page number of ledger, where the account in the journal is being posted. This will facilitate in understanding and checking the ledger posting at a glance. In the above journal, if we write ‘7’ in the L.F. column against furniture, it will mean that the Furniture Nc is prepared at page ‘7’ of the ledger. We can turn page ‘7’ of the ledger and check the posting in the ledger account. The posting can be verified from the Journal and if necessary from the source document, wherefrom the Journal is recorded.

4. Amount (Debit) and (Credit)

Every transaction has got debit and its corresponding credit of the same amount. It is therefore, necessary that the amount column should be divided into debit and credit columns. The amount of the account debited is written against the debit column of the amount and the amount of the account credited is written at the credit column of the amount.

5. Narration

After passing journal entry, we have to explain briefly the transaction for which the entry has been passed. It enables everyone going through the journal entry to have an idea about the transaction. It is customary to start the statement with the word ‘Being’ or ‘For’ denoting the reason for which entries have been passed. This statement is known as ‘narration’ meaning description, because it narrates briefly the transaction for which the entry has been passed. It is also customary to write the narration within small brackets. After the narration, horizontal line is drawn in the particulars column only just to separate the journal entry from the other entry.