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.
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FAQs on Journal
What are the features of the journal?
The features of the journal are given below:
1. Contains daily transactions in Chronological order.
2. Records both the debit as well as credit aspects of transaction by using double – entry system.
3. Shows the complete detail of a transaction in one entry.
4. Recording a transaction in journal is called Journalising and the form in which the transaction is recorded is known as Journal entry.