Journal

In this post, we will learn about Journal.

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Definition of Journal

A journal entry is a record of the business transactions in the accounting books of a business. A properly documented journal entry consists of the correct date, amounts to be debited and credited, description of the transaction and a unique reference number.

The process of recording transactions in the journal is called Journalizing. The transactions are recorded in the journal in the manner of their occurrence along with a suitable explanation, called ‘Narration‘ which supports the entry.

Features of Journal

• Contains daily transactions in Chronological order.
• Records both the debit as well as credit aspects of transaction by using double – entry system.
• Shows the complete detail of a transaction in one entry.
• Recording a transaction in journal is called Journalising and the form in which the transaction is recorded is known as Journal entry.

Advantages of Journal

• It reduces the possibility of errors.
• It provides an explanation of entry by way of narration.
• It helps in recording the transaction in chronological order.

Limitations of Journal

• Daily cash balance cannot be known.
• If all the transactions are recorded in a Journal, it will become voluminous.

FAQs on Journal