PRESENTATION ON THE

TOPIC OF THEORY OF
JOURNAL, TRIAL AND
LEDGER

Presented by
Himanshi, Ruhi, Shivani, Preeti and
Shrdha
 Meaning of Journal
 According to Eric. L. Kohler, “ The journal is a book
of original entry in which are recorded transcations
not provided for in specialised journals.
 According to Robert Anthony, “ A journal is a
chronological record of accounting transcations
showing the names of the accouts that are to be
debited, the amounts of debits and credits, and any
useful supplementary information about the
transcations. It is analogous to diary.”
 Features of journal
 Book of original entry
 Day book or diary
 Chronological record
 Maintains the identity of the transcation
 Reflects the relation
 Maintaining arithmetical accuracy
 Need for journal
 Convenient recording of the transcations
 Maintaining and preserving the identity of the
transcations.
 Ascertaining the true nature of transcations
with the help of narrations
 Maintaining permanent record of information.
 Functions of journal
 To maintain the identity of each transcation as
a permanent source of information
 To analyse each transcation into debit and
credit, so as to enable their posting in the
ledger.
 To arrange transcations chronologically i.e., in
order of date.
 Advantages of journal
 Transcations recorded date-wise explanation
 Process of classification at convenience
 Ensures that double entry rules have been followed.
 Reliable evidence
 Detection of arithmetical errors
 Provides primary source data
 Forwarding of balances
 Transfer in accounts.
 Limitations of journal

 Long and unveildy

 Daily cash balance not possible
 Difficult to locate a transcation
 Time consuming posting
 Rules of journal
 Traditional approach
 Personal accounts- debit the receiver and credit

the giver
Real account- debit what comes in and
credit what goes out
Nominal account- debit all expenses and losses
and credit all incomes and gains
 Modern S.no Name of debit Credit
approach the
account
1. Assets Increase Decrease

2. liabilities Decrease Increase

3. Capital Decrease Increase

4. Revenue Decrease Increase

5. Expenses Increase Decrease

and
losses
 Format of journal
date Particulars Ledger Debit Credit
Folio
2007 Machinery
Jan1 account-------- Dr 50,000
To Cash account 50,000
(Being machinery
purchased)
 Meaning of ledger
 According to V.G. Vickery, “ Ledger is a book
of accounts which contains in a suitably
classified form, the final and permanent record
of trader’s transcations.”
 According to Fieldhouse Arther, “Ledger is the
permanent storehouse of all the transcations.”
 Features of ledger
 It is the principal or primary book of accounts.
 The transcations are classified under
appropriate heads, called accounts.
 The information contained in the ledger
account can be used to draw the conclusion
regarding the status of any account.
 It is the basis of preparing the final accounts.
 Advantages of ledger
 Information regarding the book value of
various assets can be ascertained quickly.
 The amount of total debtors and total creditors
can be ascertained from personal accounts.
 It can provide information regarding total
purchases and total sales.
 The ledger account give details of various
expenses and incomes of the business.
 Format of ledger

Date Particulars J.F. Amt. Date Particulars J.F. A

m
t.
To name of By name
the credit of the debit
account in account in
journal journal
 Meaning of trial balance
 According to William Pickles, “ The statement
prepared with the help of ledger balances, at
the end of financial year to find out whether
debit total agrees with credit total, is called
trial balance.
 According to Rowlland, “ The final statement
of balances, joint and mixed, is called trial
balance”.
 Features of trial balance
 It is just a statement and not an account.
 It is a list of balances of all ledger accounts and the
cash book.
 It can be prepared at any time during the accounting
period, at the end of every month, every quarter or
every year.
 It is prepared to check the arithmetical accuracy of
the ledger accounts and the cash book.
 The total of debit and credit amount columns of the
trial balance must tally.
 Objectives of trial balance

 To ascertain the arithmetical accuracy of

ledger accounts.
 Completion of double entry.
 Ledger account balances
 To help in the preparation of final accounts
 Format of trial balance
S.NO. Ledger L.F. Debit Credit Amount
Accounts Amount
Errors revealed by the Trial balance
 Omission to post an amount into ledger
 Omission to post an amount into trial balance
 Wrong totalling or balancing of ledger account
 Posting on the wrong side
 Posting of wrong amount
THANK YOU