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Journal

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Journal is the first book where recording of all the government financial transactions begin. It is the first entry of all the financial transactions. It is called the form of the original entry. It is the based on the double entry system. Therefore, every transaction is recorded in the journal voucher with debit and credit. There must be a narration of the transaction. The journal voucher is prescribed by the office of the Auditor's General so it is coded as AGF NO.10.

The following are the main definitions of journal:

"A journal is a book, employed to classify or sort out transactions in a form convenient for their subsequent entry."- L.C. Cropper

"The journal or daily record as originally used was a book of prime entry in which transactions was copied in order to date from a memorandum or waste book. The entries as they were copied were classified as debits and credits, so as to facilitate they're being correctly posted afterwards in the ledger." -R. N. Carter

Hence, the journal is a book of prime or original entry in which all financial transactions of a business are systematically recorded according to their dates of occurrence and is maintained with a view to help to prepare the subsequent book of record known as the ledger.

Objectives

The main objectives of journal are given below:

  • To record all the financial transactions permanently and systematically.
  • To help to prepare the principal book or ledger.
  • To provide legal evidence of all the financial transactions performed by the business.
  • To present complete information of each transaction.
  • To show debit and credit aspects or accounts involved in each transaction.

Importance of Journal

The following are the importances of journal:

  • It provides the legal evidence of all the transactions performed by an organization.
  • It provides the foundation for further accounting processes of the transactions.
  • It provides the basis for preparing ledger accounts.
  • It helps to minimize errors in recording and posting due to the involvement of both aspects of the transactions.
  • It fulfills the further accounting processes of the transactions.

Journalizing

The financial transactions are first of all recorded in the journal. The process of recording the financial transactions in the journal in a systematic way is called journalizing. The record of the transactions made in the journal is called journal entry. Journalizing is the act of passing journal entry. The following steps are taken into consideration while journalizing the transactions:

  • Identifying the two aspects of each transaction.
  • Identifying the appropriate accounts of these two aspects of each transaction.
  • Recording each transaction in the journal book involving debit and credit accounts in chronological order.
  • Identifying the debit and credit accounts of each transaction by applying the rules of debit and credit.



  • The journal is a book of prime or original entry in which all financial transactions of a business are systematically recorded according to their dates of occurrence and is maintained with a view to help to prepare the subsequent book of record known as the ledger.
  • The process of recording the financial transactions in the journal in a systematic way is called journalizing.
  • The record of the transactions made in the journal is called journal entry.
  • Journalizing is the act of passing journal entry. 
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Very Short Questions

The following are the objectives of journal:

  • To make permanent and systematic record of all the financial transactions.
  • To help to prepare the principal book or ledger.
  • To provide legal evidence of all the financial transactions performed by the business.
  • To present complete information of each transaction.
  • To show debit and credit aspects or accounts involved in each transaction.

The importance of journal are as follows:

  • It provides the legal evidence of all the transactions performed by an organization.
  • It provides the foundation for further accounting processes of the transactions.
  • It provides the basis for preparing ledger accounts.
  • It helps to minimize errors in recording and posting due to the involvement of both aspects of the transactions.
  • It fulfills the further accounting processes of the transactions.

The following steps are taken into consideration while journalizing the transactions:

  • Identifying the two aspects of each transaction.
  • Identifying the appropriate accounts of these two aspects of each transaction.
  • Recording each transaction in the journal book involving debit and credit accounts in chronological order.
  • Identifying the debit and credit accounts of each transaction by applying the rules of debit and credit.

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  • Which of the following statements is incorrect in the double entry accounting system maintained manually?

    A journal entry should always consist of a single debit entry matched by a corresponding credit entry.


    A journal entry should always end with a narration explaining the need for it.


    A journal entry is needed only in the absence of other suitable book of prime entry for the transaction.


    A journal entry should be substantiated by appropriate voucher and authorized at proper level.


  • If a company uses special journal, cash sales should be recorded in which journal?

    Sales journal


    Cash disbursements journal


    General journal


    Cash receipts journal


  • If a company uses special journals, credit sales should be recorded in which journal?

    Sales journal


    Cash receipts journal


    Cash disbursements journal


    Purchase journal


  • If a company uses special journal, purchase of supplies on the account should be recorded in which journal?

    Cash disbursements journal


    Cash receipts journal


    Sales journal


    Purchases journal


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