Business Accounting

SYNCHRONOUS LEARNING MODE

Session 9_Topic 4_Journal-Meaning, specimen etc. Rules

of Debit & Credit

Dr. Meenakshi Kaul

SYMBIOSIS LAW SCHOOL , NOIDA
 Journal
Journal is book of original entry in which Transactions are first recorded in a
chronological order. It is also known as book of primary entry.

Book of Original Entry

Primary Book
Chronological Order
Records both aspects of Transaction
Rules of Debit & Credit

Transactions Recorded on the basis of source documents:

Invoices
Cash Memo
Purchase Bills etc.

A Journal is a chronological record of financial transactions of a business.

-M. J. Keeler
 Specimen or Format of Journal
Journal
Date Particulars L.F. Debit Credit
May 2020 Amount Amount
Cash A/c ….............................................Dr.​ 1,00,000
1      To Capital A/c​ 1,00,000
(Being the capital Invested)
 Rules of Debit & Credit

Traditional Approach
• Personal • Debit the Receiver, Credit the Giver
• Real • Debit what comes in, Credit what goes out
• Nominal • Debit all Expenses & Losses, Credit all Incomes & Gains

Modern Approach
• Assets • Increase in Asset is Debited, Decrease in Asset is Credited
• Liability • Increase in Liability is Credited, Decrease in Liability is Debited
• Capital • Increase in Capital is Credited, Decrease in Capital is Debited
• Revenue • Increase in Revenue is Credited, Decrease in Revenue is Debited
• Expense • Increase in Expense is Debited, Decrease in Expense is Credited