Journal and its Nature

Nowadays many business are using online accounting system just like SAP, QuickBooks, ERP and many other accounting software for recording data may be stored on large main computer servers rather than in journals and ledgers. However, an understanding of accounting concepts is most easily acquired by the study of manual accounting system. For this reason, we shall use standard written accounting forms, such as journal and ledger, as the model for a study of basic accounting concepts.

The Journal and its Nature

The first book in which the transaction of a business unit recorded is called a Journal. Here, business transactions are recorded in chronological order i.e in the order in which they occur.

Each record in the journal is called entry. Journal is also known as a book of original entry. Key features of Journal are as under:
1- Analysis of the effects of a transaction on the accounts with narration.
2- Describing the impact of various transactions upon a business unit.
3- Decide, what are the accounts involved, accounts involved to be debited or credited.

Ruling of a Journal

In its usual form, a Journal is divided by vertical lines into five columns in which to enter, in respect of each transactions : (a) Date; (b) Particulars; (c) Ledger folio; (d) Amount Debit; (e) Amount Credit;