Journal – Entries

Asst. Prof. Rasika Naik

Introduction to Journal
 A businessman records the transaction daily in his books of accounts. He
has to record the transaction in proper books of accounts in the
scientific ways. In this sense, ‘Journal’ is an important book which is
called as a book of “ Original entry” “Prime Entry” i.e. the book of first
book.
 The word Journal is derived from the French word “Jour” which means a
day. Journal therefore means a book of daily record.

Definition:
 According to S. Paul, “Journal is a preliminary book in which each
transaction is set down in a chronological order.”
Features of Journal
 It is a preliminary or original record of the business
transaction.
 It records all the transactions in order of
dates(chronologically) i.e. the transactions are recorded
in the same order in which they takes place.
 Transactions recorded in the form of journal entries are
briefly explained in narration. Every Journal Entry is
followed by a narration.
 It facilitates the recording of business transactions by
passing the journal entries. This work is foundation for
maintaining the ledger.
Importance of Journal Entries
 It is needed to carry out further functioning of accounting
 Journal is a book of original entry, therefore, it is
important from the point of view of book keeping.
 It records both the aspects of a transaction together at
one place. It helps to understand the transactions easily.
 It helps to cross check the transaction.
 The recording of a business transaction in the journal is
viewed as the primary source of knowing the exact nature
of a transaction. As such its reliability is found much more
in the event of searching the facts of transaction at a
future date.
Steps for Journalizing
A journal records all entries chronologically, though in a
computerized accounting system you would be able to sort
by any parameter. This process is known as journalizing.

 Find out the two accounts involved in a transaction.

 Find out the type of account i.e. Personal , Real or
Nominal
 Apply the rule for accounting and find out which account
is debited and which account is credited.
 Then enter the transaction in Journal in the proper way.
What Is Included in a Journal Entry?
A journal entry requires the following elements:
 A header which includes the date of the entry
 A reference number or a journal entry number that can be used to index and
retrieve the journal when required
 The account number and name. These are recorded in the first column into which
the entry is recorded
 The debit amount is entered in the second column
 The credit amount is entered in the third column
 L/F – means Ledger Folio
 The description of the journal entry in the footer
 Narration- Explanation about the transaction. It always starts with Being)
Format of Journal Entries

Date Particulars L/ Debit Credit

F Rs Rs
Journalized the following transactions in
the books of Ruta
Date Transaction

June 2020
1st Ruta started business with cash Rs50000/-
4th Purchase goods from Rupa on credit worth Rs
10000
7th Paid Rupa Rs.5000 on account
8th Sold goods to Neela Rs 7000/-
10th Received cash for sale of goods Rs 3000
12th Received Commission Rs1000/-
15th Purchase Furniture Rs.10000/-
Transaction Two Nature of Effect
Account Account

Ruta started business with cash

Rs50000/-
Purchase goods from Rupa on credit
worth Rs 10000
Paid to Rupa Rs.5000 on account

Sold goods to Neela Rs 7000/-

Received cash for sale of goods Rs

3000

Received Commission Rs1000/-

Transaction Two Nature of Effect
Account Account
Cash Real Debit
Ruta started business with cash Ruta’s Personal Credit
Rs50000/- Capital
Purchase goods from Rupa on credit Goods Real Debit
worth Rs 10000 /Purchases
Rupa Personal Credit
Paid to Rupa Rs.5000 on account Rupa Personal Debit
Cash Real Credit
Sold goods to Neela Rs 7000/- Goods/ Real Credit
Sales Personal Debit
Neela
Received cash for sale of goods Rs Cash Real Debit
3000 Goods / Real Credit
Sales
Received Commission Rs1000/- Cash Real Debit
Journal Entries in the books of Ruta

Date Particulars L/ Debit Rs Credit Rs

F
1st Cash 50000
Jun A/C……………………….D 50000
r To Ruta’s Capital
A/C
( Being Started
business with cash)
4th Goods/ Purchases 10000
Jun A/C …Dr 10000
To Rupa A/C
Journal Entries in the books of Ruta

Date Particulars L/ Debit Rs Credit Rs

F
7th Rupa 5000
Jun A/C……………………….D 5000
r
To Cash A/C
( Being paid to Rupa
on account)
8th Neela 7000
June A/C……………………..Dr 7000
To Goods/ Sales A/C
Journal Entries in the books of Ruta

Date Particulars L/ Debit Rs Credit Rs

F
10th
Cash 3000
Jun A/C………………………Dr 3000
To Goods / Sales
A/C
(Being sold goods)
12th
Cash 1000
June A/c……………………….. 1000
Dr
To Commission A/C
Journal Entries in the books of Ruta

Date Particulars L/ Debit Rs Credit Rs

F
15th
Furniture 10000
Jun A/c…………………Dr 10000
To Cash A/C
( Being Purchased
furniture)
Total Rs 86000 86000
Thank you
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