A journal is a detailed account that records all the financial transaction to accounts and the transfer of information to other official account records, such as the general ledger.
The format of journal is given below:
In the books of……….
| Date | Particulars | L.F | Debit | Credit |
|---|---|---|---|---|
A journal contains five columns; Date, Particulars, L.F., Debit and Credit.
Date column:In this column the date of the transaction is recorded.
Particulars column: The accounts involved in the transaction are recorded in this column. The account debited is recorded first with the word ‘Dr.’ entered towards the end of the row and the account credited is entered in the next line after leaving a little space on the left and preceded by the word ‘To’.
Ledger Folio column (L.F.): The page number of ledger in which the accounts debited and credited are maintained is recorded here. Folio means page and ledger folio means page number of ledger. This L.F. helps in cross verification of accounts in the ledger and helps in audit of accounts.
Debit column: The amount to be debited is recorded in this column. The unit of measurement, that is, amount expressed in the currency of the country is recorded in this column. For example, in India amount is recorded in rupees (`).
Credit column: The amount to be credited is recorded in this column. The unit of measurement, that is, the currency of the country is written in this column. For example, in India amount is recorded in rupees (`).
Narration: A short description of each transaction is written under each entry which is called narration.
The journal entries may be of the following types:
rathna is a sole trader dealing in textiles. From the following transactions,pass journal entries for the month of March, 2018.
| 1 Commenced business with cash Commenced business with goods | 90,000 60,000 |
| 2 Purchased 20 readymade shirts from X and Co. on credit | 10,000 |
| 3 Cash deposited into bank through Cash Deposit Machine | 30,000 |
| 4 Purchased 10 readymade saran from Y and Co. by cash | 6,000 |
| 5 Paid X and Co. through NEFT | |
| 6 Sold 5 saran to A and Co. on credit | 4,0000 |
| 7 A and Co. deposited the amount due in Cash Deposit Machine | |
| 8 Purchased 20 saran from Z & Co. and paid through debit card | 12,000 |
| 9 Stationery purchased for and paid through net banking | 6,000 |
| 10 Bank charges levied | 200 |
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