JOURNAL
DEFINATION
Journal is a book of prime entry or original entry in which all financial transactions of a business are systematically recorded according to their dates of occurrence and is maintained with a view to prepare the subsequent book of record known as the ledger.
OBJECTIVES OF THE JOURNAL
To keep a systematic record of financial transactions.
To show financial transactions in chronological order.
To present necessary information about the financial transactions.
To use as legal evidence of financial transactions.
To facilitate the preparation of ledger book.
SPECIMEN OF THE JOURNAL
Journal entries in the book of...
RULES OF JOURNALIZING
1. On the basis of types of account(personal real and nominal accounts)
2. On the basis of accounting equation
DR for DEBIT
• CR for CREDIT
Business entity concept
Assets current assets and fixed assets
JOURNAL ENTRIES
1.Commencement/starting business and Drawing
Establishment of Business
Drawing from Business for personal use
Drawing for office use
2.Purchase and Sales
Purchase
Sales
3.Purchase Return and Sales Return
Purchase return
Sales return
4.Payment to creditors and Receipt from debtors
Payment to creditors
Receipt from debtors
5.Purchase and Sales of fixed assets(non trading goods)
Purchase of Fixed Assets
Sales of Fixed Assets
6.Incomes and Expenses
Incomes
Expenses
7.Depreciation and Appreciation on Fixed Assets ,Bad debt and Bad debt recovered
Depreciation on Fixed Assets
Appreciation on Fixed Assets
Bad debt
Bad debt recovered
8.Loan taken and Loan given/Payment of Loan
While taking loan
While making payment of the loan taken
While lending or giving loan
While receiving payment of loan lended
9.Interest on capital
10.Interest on Investment received
11.Prepaid Expense and outstanding Expense
Prepaid/Advance expense
Outstanding expense or expense payable
12.Advance income and Accrued income
While receiving advance income
Accrued income(income earned but not received payment)
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