JOURNAL

All transactions recorded in books of

business is from business point of
view
 Journal
• JOUR (French word)  daily records
• It is a book of accounts

• Journalising – the process of recording

transactions in journal
 Features & Functions & Advantages (ledger)
1. Book of original entry :- All the business transactions r recorded /copied for the first time from a source
document /memorandum / waste book (maintenance not necessary & useful to organise a journal) /
when they take place . This minimise omission of transaction in ledger
2. Book of primary/original entry [ Professor Carter] All the business transactions recorded in journal r
subsequently transferred to ‘ledger’ [principle book of accounts] . Hence journal provides basis for
posting into ledger conveniently
3. Daily Accounting Record :- All the business transactions of each day r recorded in the journal on the same
day .
4. Chronological order :- All the business transactions r recorded in date wise order which helps to locate a
particular transaction when required
5. Double entry system :- All the business transactions r classified into credit & debit according to
principles of double entry system of book keeping which helps in their correct posting in ledger
6. Journal Entry :- Business transactions when recorded in journal r called JOURNAL ENTRY .
1 – simple journal entry - a single journal entry

2 – compound journal entry – a single journal entry capable of recording

more than 1 business transactions involving more than 2 accounts .
Eg- opening entry
7. Individual Identity :- journal maintains the identity of each transaction on permanent basis & provides
a complete picture of the same in 1 entry along with amount of each transaction
8. Narration :- it should be short , complete , clear . Each entry in journal is followed by a brief explanation
of the transactions. It helps to know the reason of entry or why particular A/C was Dr. or Cr. In future&
helps in posting into ledger without any explanation
9. Journal facilitates cross checking of ledger accounts in case a trial balance does not agree (with help of
L.F column )
 Limitations
1. Sub –journal :- When size of business increases, the no. Of transaction
is large , it become bulky & voluminous to record all the transactions in
Journal . Hence Journal is sub divided into no. of Sub – journals -
special purpose subsidiary books / books of original entry . Each type
of transaction is recorded in separate subsidiary book according to the
need of business. Eg – cash book , journal proper etc
2. Repetitive posting labour :- many transactions r repetitive in nature
which involve debiting & crediting same accounts time & again when
recorded in journal leading to Repetitive posting labour .
3. Cash book :- cash transactions need not to be recorded in journal as
they r recorded in separate book – cash book to ascertain cash balance
everyday
4. Journal does not provide required information on prompt basis
 Format of journal
DATE PARTICULARS L.F - Ledger folio Amount
Dr. (Rs)
Amount
Cr. (Rs)
[2022]
The year ----- A/C _____________Dr. All entries from journal r later Addebi
& month To ----A/C posted into ledger a/c . tare &
is written (Being -----(narration)) The page / folio number of ledger debere
only once _____(end line)________ A/C where the posting has been  the
made from the journal is recorded verb
forms
in L.F column of journal . of
Advantages :- debit
1. This column shows whether an (Dr.) in
entry has been posted or not , Italian
no page no. means it has not & latin
been posted to ledger so far langua
2. Understanding & checking ge
ledger posting at a glance in
future
3. Journal facilitates cross
checking of ledger accounts in
case a trial balance does not
agree with help of L.F column
 Steps of Journalising
• Analyse A/C involved in journal entry
• Apply rules ( modern & traditional approach )
• Do totalling & Total Dr. = Total Cr. . Dr. & Cr.
Terms represent both favourable (increase) &
unfavourable (decrease) depending upon nature
of A/C
• C/F (carried forward) – written at end of page
• B/F (brought forward) – written at start of page
 Rules of Credit & Debit (Journalising )
• MODERN /AMERICAN APPROACH :-
1. Assets A/C (A)
increase (i) – Debit (Dr.)
decrease (d) – Credit (Cr.)
2. Liabilities A/C (L)
increase –Cr.
decrease – Dr.
3. Losses /Expense / Taxes A/C (E)
increase –Dr.
decrease – Cr.
4. Revenue / Income A/C (I)
increase –Cr.
decrease – Dr.
5. Capital / Owner’s Equity A/C
increase –Cr.
decrease – Dr.
 Personal Natural Real Tangible
ENGLISH / TRADITIONAL
APPROACH :- Artificial Intangible
( double entry system ) Representative
Nominal
Impersonal
• ENGLISH / TRADITIONAL APPROACH :-
1. Personal A/C – Dr. the receiver It is not necessary to mention A/C
Cr. the giver after personal accounts
(i) Natural – individual A/C . Eg- mohan , capital , drawings , debtor , creditor A/C
(ii) Artificial – firm/company/institution/bank A/C .
(iii) Representative – p/p (prepaid) expenses , o/s (outstanding) expenses , Accrued (earned
but not received) income , pre received income , unearned (not by employment ) income
2. Impersonal A/C –
With the addition of prefix / suffix ,
I- Real A/C (properties) - Dr. What comes in
Nominal A/C  Representative A/C
Cr. What goes out
(i) Tangible – it has monetary value & can be touched , felt , measured , purchased , sold .
Eg- cash , stock , furniture ,machinery, land , building A/C
(ii) Intangible – it has monetary value & can’t be touched, felt, measured, purchased ,sold .
Eg- goodwill , patents , copyrights , trademarks A/C

II – Nominal A/C (expenses& incomes ) - Dr. All expenses/losses – Eg : salaries , rent ,

discount allowed, bad debts , advertisement , audit fees , repair , bank charges , purchase ,
purchase return
Cr. All income / gain - Eg: commission , interest ,
discount received , sales , sales return
Opening entry
1. Ravi started a business with Rs 2,00,000 .
A – Cash A/C – i – Dr
L – Capital A/C –i – Cr
2. Furniture / Machinery purchased for 10,000
A – Cash A/C – d– Cr
A– Furniture Machinery A/C –i – Dr
3. Paid salary /wages/advertisement/rent
expenses to Gopal 500
A – Cash A/C – d– Cr
E – salary /wages/advertisement /rent A/C –i
Dr
4. Received commission / interest 500
A – cash A/C – i– Dr
I – commission / / interest A/C –i – Cr
 Journal of Ravi
DATE PARTICULARS L. Amount Amount
[2022] F Dr. (Rs) Cr. (Rs)
1 June Cash A/C ___________________________Dr. 2,00,000
To Capital A/C 2,00,000
(Being Ravi started a business with Rs 2,00,000 )
______________________________________________
2 June Furniture A/C ___________________________Dr. 10,000
Machinery A/C ___________________________Dr. 10,000
To Cash A/C 20,000
(Being Furniture /Machinery purchased for 10,000)
______________________________________________
DATE PARTICULARS L. Amount Amount
[2022] F Dr. (Rs) Cr. (Rs)
6 June wages A/C ___________________________Dr 500
salary A/C ___________________________Dr 500
advertisement A/C ____________________Dr 500
rent A/C __________________________Dr 500
To Cash A/C 2000
(Being Paid salary /wages/advertisement/rent expenses
to Gopal 500)
______________________________________________
7 June Cash A/C ___________________________Dr 1000
To commission A/C 500
To interest A/C 500
(Being Received commission / interest 500)
______________________________________________
1. Paid into bank for opening a current A/C 20000
A – Cash A/C – d – Cr
A – Bank A/C – i – Dr
2. Placed a fixed deposit A/C by bank by transferring from current A/C 20000
A – fixed asset A/C – i – Dr
A – bank A/C – d– Cr
3. Withdraw from bank for personal/private use 1,000
A – bank A/C – d– Cr
E – Drawings A/C –i – Dr
4. Withdraw from bank 1,000
A – Cash A/C – i – Dr
A – Bank A/C – d – Cr
5. Withdraw cash for personal/private use 1,000
A – Cash A/C – d– Cr
E – Drawings A/C –i – Dr /
L – Capital A/C – d –Dr
6. Paid life insurance premium by cheque 1000
A – Bank A/C – d– Cr
E– Drawings A/C –i – Dr
7. Paid insurance premium by cheque 1000
A – Bank A/C – d– Cr
E– insurance A/C –i – Dr
DATE PARTICULARS L. Amount Amount
[2022] F Dr. (Rs) Cr. (Rs)
6 June bank A/C ___________________________Dr 20000
To Cash A/C 20000
(Being Paid into bank for opening a current A/C 20000 )
______________________________________________

6 June fixed deposit A/C ___________________________Dr 20000

To bank A/C 20000
(Being Placed a fixed deposit A/C by bank by transferring
from current A/C 20000 )
______________________________________________
3 June Drawings A/C ____________________Dr. 1,000
To bank A/C 1,000
(Being Withdraw from bank for personal/private use
1,000 )
______________________________________________
3 June Cash A/C ____________________Dr. 1,000
To bank A/C 1,000
(Being Withdraw from bank 1,000)
______________________________________________
DATE PARTICULARS L. Amount Amount
[2022] F Dr. (Rs) Cr. (Rs)
3 June Drawings A/C / Capital A/C ____________________Dr. 1,000
To Cash A/C 1,000
(Being Withdraw cash for personal use 1,000 )
______________________________________________

4 June Drawings A/C / ____________________________Dr. 1,000

To bank A/C 1,000
(Being Paid life insurance premium by cheque 1000)
______________________________________________

5 June insurance A/C / __________________________Dr. 1,000

To bank A/C 1,000
(Being Paid insurance premium by cheque 1000 )
______________________________________________

1. Goods purchased for 40,000 / cash purchase
A – Cash A/C – d– Cr
E – Purchase A/C –i – Dr
2. Goods purchased for 40,000 from Shankar /
credit purchase
L – Shankar A/C – i – Cr
E – Purchase A/C –i – Dr
3. Paid cash to Shankar 8,000 / paid cash to
creditor
A – Cash A/C – d– Cr
L – Shankar A/C – d – Dr
4. Goods returned to Shankar 10,000 /
returned goods to creditor
L – Shankar A/C – d – Dr
E – Purchase Return A/C –d– Cr
5. Paid cash to Shankar 20,000 in full settlement
of 22,000 (CD) / paid cash to creditor in full
settlement with cd
A – Cash A/C – d– Cr
I – Discount Received A/C –i – Cr
L – Shankar A/C – d – Dr
6. Purchased goods from chavi of the list price
of 20000 at 15% trade discount [ 20000 –
3000 = 17000 ] / credit purchase along with
td
L – Chavi A/C – i – Cr
Purchase = expense
E – Purchase A/C –i – Dr
7. Returned goods to chavi of the list price of
2000 [ 1700] / returned goods to creditor
along with td
L – Chavi A/C – d – Dr
E – Purchase return A/C –d– Cr
8. Purchased goods from mohit of the list price
of 20000 at 15% trade discount [ 20000 –
3000 = 17000 ] & 10% CD credit purchase
along with td & cd
E – Purchase A/C –i – Dr
L – mohit A/C – i – Cr
I – Discount Received A/C –i – Cr
9. Purchase goods from harsh of the list price of
20000 at 15% trade discount [ 20000 – 3000
= 17000 ] & 10% CD. Done half payment
immediately , half by cheque & half by cash
(6800) credit / cash / cheque purchase
along with td & cd on x paisa (percent)
L– harsh A/C – i– Cr
E – purchase A/C–i – Dr
A – Cash A/C –d– Cr
A – Bank A/C - d– Cr
I – Discount received A/C –i – Cr
DATE PARTICULARS L. Amount Amount
F Dr. (Rs) Cr. (Rs)
1 July Purchase A/C ________________________Dr 40,000
To cash A/C 40,000
(Being Goods purchased for 40,000)
_______________________________________________
2 July Purchase A/C ________________________Dr 40,000
To Shankar A/C 40,000
(Being Goods purchased for 40,000 from Shankar )
_______________________________________________
3 July Shankar A/C ________________________Dr 8,000
To cash A/C 8,000
(Being Paid cash to Shankar 8,000 )
_______________________________________________
4 July Shankar A/C ________________________Dr 10,000
To Purchase Return A/C 10,000
(Being Goods returned to Shankar 10,000)
_______________________________________________
5 July Shankar A/C ________________________Dr 22,000
To cash A/C 2,000
To Discount Received A/C 20,000
(Being Paid cash to Shankar 20,000 & Discount Received
of 2,000)
_______________________________________________
C/F 1,20,000 1,20,000
DATE PARTICULARS L. Amount Amount
F Dr. (Rs) Cr. (Rs)
B/F 1,20,000 1,20,000
6 July Purchase A/C ___________________________Dr 17000
To Chavi A/C 17000
(Being Purchased goods from chavi of the list price of
20000 at 15% trade discount )
_______________________________________________
7 July Chavi A/C ___________________________Dr 1700
To Purchase return A/C 1700
(Being Returned goods to chavi of the list price of 2000 )
_______________________________________________
8 July Purchase A/C ___________________________Dr 17000
To mohit A/C 15300
To Discount Received A/C 1700
(Being Purchased goods from mohit of the list price of
20000 at 15% trade discount [ 20000 – 3000 = 17000 ] &
10% CD)
_______________________________________________
9 July Purchase A/C ___________________________Dr 17000
To harsh A/C 8500
To Discount Received A/C 850
To cash A/C 3825
To bank A/C 3825
(Being Purchase goods from harsh of the list price of
20000 at 15% trade discount & 10% CD. Done half
payment immediately , half by cheque & half by cash
 Sales = income
1. Goods sold for 30,000 / cash sales 8. Sold goods to sohan of the list price of 20000 at
A – Cash A/C – i– Dr 15% trade discount [ 20000 – 3000 = 17000 ] & 10%
I – Sales A/C –i – Cr CD / credit sales along with td & cd
2. Goods sold for 30,000 to meena / credit sales A – sohan A/C – i– Dr
A – meena A/C – i– Dr E – Discount Allowed A/C –i – Dr
I – Sales A/C –i – Cr I – Sales A/C –i – Cr
3. Received cash from meena 15,000 / received cash 9. Sold goods to harsh of the list price of 20000 at 15%
from debtor trade discount [ 20000 – 3000 = 17000 ] & 10% CD.
A – meena A/C – d– Cr Harsh did 40% payment immediately half by cheque
A – Cash A/C – i – Dr & half by cash (6800) credit / cash / cheque sales
4. Meena returned goods 1,000 / goods returned by along with td & cd on x paisa (percent)
debtor A – harsh A/C – i– Dr
A – meena A/C –d– Cr E – Discount Allowed A/C –i – Dr
I – Sales Return A/C –d– Dr A – Cash A/C – i– Dr
A – Bank A/C – i– Dr
5. Received cash from meena 12000 in settlement of I – Sales A/C –i – Cr
14000 (CD) / received cash from debtor in full
settlement with cd 10.Goods sold for 40,000 out of this 30000 deposited
A – meena A/C – d– Cr in bank
A – Cash A/C – i – Dr A – Cash A/C – i– Dr
E – Discount Allowed A/C –i – Dr A – Bank A/C - i– Dr
E – Purchase A/C –d– Cr
6. Sold goods to mohan of the list price of 20000 at
15% trade discount [ 20000 – 3000 = 17000 ] / 11.Sold goods to harsh of the list price of 20000 at 15%
credit sales along with td trade discount [ 20000 – 3000 = 17000 ] & 10% CD
A – mohan A/C – i– Dr if payment is received within 10 days . She paid half
I – Sales A/C –i – Cr the amount within 6 days & 30% of remainder
within 12 days [ 3 entry]
7. Mohan returned goods of the list price of 2000
[ 1700] / goods returned by debtor along with td 12.Sold goods to kanika 10000at 20% profit , 10%
A – mohan A/C – d– Cr td,5% cd . She paid 40% payment immediately by
I – Sales return A/C –d – Dr cheque
DATE PARTICULARS L. Amount Amount
F Dr. (Rs) Cr. (Rs)
1 Aug Cash A/C ___________________________Dr 30,000
To Sales A/C 30,000
(Being Goods sold for 30,000 )
______________________________________________
2 Aug meena A/C ___________________________Dr 30,000
To Sales A/C 30,000
(Being Goods sold for 30,000 to meena)
______________________________________________
3 Aug Cash A/C ___________________________Dr 15,000
To meena A/C 15,000
(Being Received cash from meena 15,000)
______________________________________________
4 Aug Sales Return A/C ___________________________Dr 1,000
To meena A/C 1,000
(Being Meena returned goods 1,000)
______________________________________________
5 Aug Discount Allowed A/C ________________________Dr 2,000
Cash A/C _________________________________Dr 12,000
To Meena A/C 14,000
(Being Received cash from meena 12000 & Discount
Allowed 14000)
______________________________________________
DATE PARTICULARS L. Amount Amount
F Dr. (Rs) Cr. (Rs)
6 Aug Mohan A/C ___________________________Dr 17000
To sales A/C 17000
(Being Sold goods to mohan of the list price of 20000 at
15% trade discount)
_______________________________________________
7 Aug Sales return A/C ___________________________Dr 17000
To Mohan A/C 17000
(Being Mohan returned goods of the list price of 2000 )
_______________________________________________
8 Aug Sohan A/C ___________________________Dr 17000
Discount Allowed A/C ______________________Dr. 1700
To Sales A/C 15300
(Being Sold goods to sohan of the list price of 20000 at
15% trade discount [ 20000 – 3000 = 17000 ] & 10% CD)
_______________________________________________
9 Aug Cash A/C ___________________________Dr 3060
bank A/C ___________________________Dr 3060
Harsh A/C ___________________________Dr 10200
Discount Allowed A/C ______________________Dr. 680
To Sales A/C 17000
(Being Sold goods to harsh of the list price of 20000 at
15% trade discount & 10% CD. Harsh did 40% payment
immediately half by cheque & half by cash
_______________________________________________
DATE PARTICULARS L. Amount Amount
F Dr. (Rs) Cr. (Rs)
10 Aug Cash A/C ___________________________Dr 10000
bank A/C ___________________________Dr 30000
To Sales A/C 40000
(Being Goods sold for 40,000 , 30000 deposited in bank )
______________________________________________
11 Aug Sudha A/C ________________________Dr 17000
To sales A/C
(Being Sold goods to harsh of the list price of 20000 at 17000
15% trade discount (17000))
______________________________________________
17 Aug Discount Allowed A/C ________________________Dr 850
Cash A/C _________________________________Dr 7650
To Harsh A/C 8500
(10% CD if payment is received within 10 days . She paid
half the amount within 6 days & 30% of remainder within
12 days )
______________________________________________
23 Aug Cash A/C _________________________________Dr 2550
To Harsh A/C 2550
(30% of remainder within 12 days )
______________________________________________
DATE PARTICULARS L. Amount Amount
F Dr. (Rs) Cr. (Rs)
10 Aug Discount Allowed A/C ___________________________Dr 216
bank A/C ___________________________Dr 4104
kanika A/C ____________________________Dr. 6480
To Sales A/C 10800
(Being Sold goods to kanika 10000at 20% profit , 10%
td,5% cd . She paid 40% payment immediately by cheque )
______________________________________________
11 Aug Sudha A/C ________________________Dr 17000
To sales A/C
(Being Sold goods to harsh of the list price of 20000 at 17000
15% trade discount (17000))
______________________________________________
17 Aug Discount Allowed A/C ________________________Dr 850
Cash A/C _________________________________Dr 7650
To Harsh A/C 8500
(10% CD if payment is received within 10 days . She paid
half the amount within 6 days & 30% of remainder within
12 days )
______________________________________________
23 Aug Cash A/C _________________________________Dr 2550
To Harsh A/C 2550
(30% of remainder within 12 days )
______________________________________________