Summary of Post
What is a journal?.Journal is a book of first or original entry in which transactions are recorded. When a transaction is happens, the first record of the transaction is done in journal. It is also known as ‘Day book’ . Journal is a record book of transaction,in which transactions are recorded chronologically.
A journal will have following information.
- Date for each transaction
- Account and amount to be debited and credited.
- A description of each transaction called Narration
- A folio column, in which the folio number of Ledger book entered.
Use of Journal in accounting.
When following manual accounting, think about a high volume transactions business, it is very difficult to obtain information from a single journal book.In order to make a better accounting system, classification is desirable at journalising stage it self. It helps in smooth accounting process,like ledger ( secondary book of accounting)posting,Preparing Reports & Analysis.
Use of Journal in Modern accounting world.
Today majority of businesses moved into computerized accounting in which only journal book is required called daybook. That too transactions are transferred in to daybook and ledger automatically at the time of entering transaction information in the accounting applications.