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The books in which a transaction is recorded for the first time from a source document are called Books of Original Entry or Prime Entry. Journal is one of the books of original entry in which transactions are originally recorded in a chronological (day-to-day) order according to the principles of Double Entry System.
Journal is a date-wise record of all the transactions with details of the accounts debited and credited and the amount of each transaction.
Format - Journal
Date |
Particulars |
L.F. |
Debit Amount
Rs. |
Credit Amount
Rs. |
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Explanation:
1. Date : In the first column, the date of the transaction is entered. The year and the month is written only once, till they change. The sequence of the dates and months should be strictly maintained.
2. Particulars : Each transaction affects two accounts, out of which one account is debited and the other account is credited. The name of the account to be debited is written first, very near to the line of particulars column and the word Dr. is also written at the end of the particulars column. In the second line, the name of the account to be credited is written, starts with the word ‘To’, a few space away from the margin in the particulars column to the make it distinct from the debit account.
3. Narration : After each entry, a brief explanation of the transaction together with necessary details is given in the particulars column with in brackets called narration. The words ‘For’ or ‘Being’ are used before starting to write down narration. Now, it is not necessary to use the word ‘For’ or ‘Being’.
4. Ledger Folio (L.F): All entries from the journal are later posted into the ledger accounts. The page number or folio number of the Ledger, where the posting has been made from the Journal is recorded
in the L.F column of the Journal. Till such time, this column remains blank.
5. Debit Amount : In this column, the amount of the account being debited is written.
6. Credit Amount : In this column, the amount of the account being credited is written.
Steps in Journalising
The process of analysing the business transactions under the heads of debit and credit and recording them in the Journal is called Journalising. An entry made in the journal is called a ‘Journal Entry’.
Step 1 - Determine the two accounts which are involved in the transaction.
Step 2 - Classify the above two accounts under Personal, Real or Nominal.
Step 3 - Find out the rules of debit and credit for the above two accounts.
Step 4 - Identify which account is to be debited and which account is to be credited.
Step 5 - Record the date of transaction in the date column. The year and month is written once, till they change. The sequence of the dates and months should be strictly maintained.
Step 6 - Enter the name of the account to be debited in the particulars column very close to the left and side of the particulars column followed by the abbreviation Dr. in the same line. Against this, the mount to be debited is written in the debit amount column in the same line.
Step 7 - Write the name of the account to be credited in the second line starts with the word ‘To’ a few space away from the margin in the particulars column. Against this, the amount to be credited is written in the credit amount column in the same line.
Step 8 - Write the narration within brackets in the next line in the particulars column.
Step 9 - Draw a line across the entire particulars column to separate one journal entry from the other.
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