We have discussed in detail that how the business transactions are analysed and how different accounts are debited and credited. Now, we are in a good position to record various business transactions in proper books of accounts. According to double entry system transaction are recorded in the books of accounts in two stages:
First Stage --- Journal
Second Stage --- Ledger
The stream of accounting data from the time an exchange happens to its recording in the record may be represented as follows:
Definition and Explanation Of Journal:
The word Journal has been gotten from the French word "Jour" Jour means day. Along these lines, diary implies every day. Transaction are recorded every day in diary and consequently it has named so. When a transaction happens its debit and credit angles are dissected and as a matter of first importance recorded sequentially (in the request of their event) in a book together with its short depiction. This book is known as Journal. Hence we see that the most essential capacity of diary is to demonstrate the relationship between the two records joined with a transaction. This encourages composing of record. Since exchanges are most importantly recorded in diary, so it is called book of unique passage or prime section or essential section or preparatory section, or first entry.
Entry:
Recording a transaction in the proper spot of the concerned book of record is called section. Passage may be of the accompanying two sorts:
journal Entry:
Recording an exchange in a diary is called diary section or journalizing.
Ledger Entry:
Recording an exchange from journal to the concerned record in the record is called journal section. It is otherwise called record posting.
Narration:
A short clarification of every transaction is composed under every section which is called narration. The topic of the transaction can be found out through Narration. Other than this, if there be any misstep in deciding debit or credit part of an exchange, it can be effortlessly identified from portrayal. "A journal passage is not finish without Narration".
Characteristics:
Journal has the accompanying elements:
1. Journal is the first fruitful stride of the twofold passage framework. A transaction is recorded as a matter of first importance in the diary. In this way, diary is known as day book.
2. An exchange is recorded around the same time it happens. Along these lines, diary is likewise called a day book.
3. Transaction are recorded sequentially. Along these lines, diary is called Day book.
4. For every Transaction the names of the two concerned records demonstrating which is charged and which is credited, are obviously built into back to back lines. This makes record - posting simple. That is the reason journal is called "assistant to ledger" or "subsidiary book".
5. Narration is composed underneath every section.
6. The sum is composed in the last two sections - charge sum in debit segment and credit sum in credit column.
Advantages of Journal:
The following are the benefits of journal:
1. Every transaction is recorded when it happens. So there is no plausibility of any transaction being precluded from the books of account.
2. Since the transaction are kept recorded in diary sequentially with portrayal, it can be effortlessly found out when and why an transaction has occurred.
3. For every single transaction which of the two concerned records will be charged and which record credited, are obviously composed in diary. Along these lines, there is no probability of submitting any misstep in composing the record.
4. Since every one of the points of interest of exchanges are recorded in journal, it is not important to rehash them in ledger. Therefore record is kept clean and brief.
5. Diary demonstrates the complete story of an exchange in one section.
6.Any error in record can be effortlessly recognized with the assistance of journal.
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