JOURNAL

MEANING OF JOURNAL
• Journal is a historical record of business transactions or
events.
• The word journal comes from the French word "Jour"
meaning "day".
• Journal is a primary book for recording the day to day
transactions in a chronological order i.e. in the order in
which they occur.
• The journal is a form of diary for business transactions.
• This is also called the book of first entry since every
transaction is recorded firstly in the journal.
 FORMAT OF A JOURNAL
JOURNAL
Date Particulars LF Debit (Rs) Credit (Rs)
(a) Date Column : This column shows the date on which
the transaction is recorded.

(b) Particular Column : Under this column, first the

names of the accounts to be debited, then the names of the
accounts to be credited and lastly, the narration (i.e. a brief
explanation of the transaction) are entered.

(c) L.F., i.e. Ledger Folio Column : Under this column,

the ledger page number containing the relevant account is
entered at the time of posting.
(d) Debit amount Column : Under this column, the
amount to be debited is entered.
(e) Credit amount Column : Under this column, the
amount to be credited is entered.
 Meaning of Journalizing
The process of recording a transaction in the journal is
called journalizing.
The various steps to be followed in journalizing business
transactions are given below :

Step 1 Ascertain what accounts are involved in a transaction.

Step 2 Ascertain what is the nature of the accounts involved.
Step 3 Ascertain which rule of debit and credit is applicable
for each of the accounts involved.
Step 4 Ascertain which account is to be debited and which
is to be credited.
Step 5 Record the date of transaction in the 'Date column'.

Step 6 Write the name of the account to be debited, very

close to the left hand side i.e. the line separating the 'Date
column' and the 'Particulars column') along with the
abbreviation 'Dr.' on the same line against the name of the
account in the 'Particulars column' and the amount to be
debited in the 'Debit Amount column' against the name of
the account.
Step 7 Write the name of the account to be credited in the
next line preceded by the word 'To' at a few spaces towards
right in the 'Particulars column' and the amount to be credited
in the 'Credit Amount column' against the name of the
account.

Step 8 Write 'Narration' (i.e. a brief description of the

transaction) within brackets in the next line in the 'Particulars
column'.

Step 9 Draw a line across the entire 'Particulars column' to

separate one Journal Entry from the other.
Illustration 5 : Journalize the following transactions :

2019 Jan. 1 Mohan started business with cash 80,000

2019 Jan. 6 Purchased goods from Ram on credit 30,000
2019 Jan. 8 Sold goods on cash 6,000
2019 Jan. 15 Bought Furniture from Yash for cash 8,000
2019 Jan. 18 Paid Salary to manager 6,500
2019 Jan. 20 Paid Rent to land lord in cash 1,000
Journalize the Following Transactions
2019 July 1. Cash brought in by proprietor as capital Rs. 30000
2019 July 2. Goods purchased on credit from Madan Lal Rs. 5,000
2019 July 3. Furniture purchased for cash Rs. 10000
2019 July 4. Goods sold on credit to Dev Raj Rs. 1600
2019 July 5. Goods purchased for cash Rs. 4500
2019 July 6. Goods sold for cash Rs. 2100
2019 July 7. Rent paid for shop to landlord 3000
2019 July 8. Commission received in cash 2000
2019 July 9. Cash deposited into bank 5000
2019 July 10. Cash withdrawn from bank for office use Rs. 2000
2019 July 11. Cash drawn by proprietor from business for personal use Rs. 3000
2019 July 12. Goods given as charity Rs. 1000
2019 July 15. Carriage paid on machinery ( expenses on purchase of asset ) Rs.
1000
2019 July 16. Depreciation on fixed assets Rs. 500
2019 July 18. Goods given as free samples Rs. 1500
2019 July 19. Interest allowed on capital Rs. 600
2019 July 20. Interest charged on drawings Rs. 500
2019 July 21. Bank charges or interest charged by bank Rs. 200
2019 July 22. Goods lost by fire Rs. 800
2019 July 25. Interest paid on loan. Rs. 1000
Create journal entries for the following transactions

1. Harish started business with cash Rs. 10000

2. Bought goods from Manohar 5000
3. Purchase fittings for cash Rs. 800
4. Sold goods to Charanjeet Rs. 1600
5. Paid Manohar Rs. 3000
6. Sold goods Vadva Ram Rs. 2000
7. Received from Charanjeet Rs. 1540 and allowed him
discount Rs. 60
8. Paid wages Rs. 80
9. Bought goods for cash Rs. 600
10. Sold goods to Ramesh Rs. 3400
11. Purchase goods from Purchotam Ra. 2600
12. Paid Manohar in settlement Rs. 1900 and discount
allowed by him Rs. 100
13. Paid carriage from goods and sold Rs. 40
14. Paid wages Rs. 80
15. Bought goods Manohar Rs. 3000
16. Bought goods for cash Rs. 800
17. Sold goods Vadva Ram Rs. 3600
18. Vadva Ram paid on account Rs. 4000
19. Purchase goods from Harbans Rs. 1500
20. Sold goods for cash Rs. 1600
21. Paid wages Rs. 80
22. Paid to Harbans Rs. 1440 and discount allowed by him Rs. 60
23. Sold goods to Charanjeet Rs. 2600
24. Bought goods for Manohar Rs. 1400
25. Bought goods for cash Rs. 1460
26. Paid on account to Manohar Rs. 1460
27. Received from Charanjeet Rs. 4000
28. Paid wages Rs. 80
29. Paid for electric lighting Rs. 100
30. Paid rent Rs. 160
31. Harish drew for personal use Rs. 300
32. Purchases Rs. 80
33. General expense Rs. 190
34. Carriage outwards Rs. 60
Q: Mr Robert commenced business on 1st June, 2019 with a capital of
Rs 100,000 in cash. On the same date he opened the bank account
in SBI Bank and deposited Rs 20,000. During the month of June
2019 the following transactions took place:
June 2 Bought goods for cash 70,000
June 3 Sold goods to Steve Co. (Credit) 38,000
June 4 Sold goods for cash 9,000
June 5 Steve Co. paid by cheque 35,000
June 6 Stationery bill paid by cheque 2,000
June 7 Telephone bill by cash 500
June 8 Paid rent by cash 2,000
June 11 Paid salaries by cash 3,000
June 11 Withdrew cash personal use 5,000
June 14 Purchased goods for cash10,000
June 19 Sold goods to Swati5,000
June 21 Purchased furniture3,000
June 22 Cash received from Swati In full setlement
June 27 Paid rent1,000
June 29 Paid salary 1,500