Journalising Accounts

Debiting or crediting each and every individual account for every single transaction is very time-consuming as well as an erroneous method. These hurdles can be overcome by recording the debit and its corresponding credit or the credit and its corresponding debit in a subsidiary book. A journal is one such book. The word "Journal" has been derived from the french word "Jour" meaning daily records. Journalising is the process of recording your day-to-day transactions in chronological order classified into debits and credits so that the final process of posting these accounts into ledgers is facilitated. The journal is sub-divided into fire columns (see figure below). These columns are Date, Particulars, Ledgers Folio, Amount (Debit), and Amount (Credit).

Journalising Accounts Entry Format

These columns are meant to record the following information:

Date

This is the first column of the journal. It records the date of the transaction with its month and year.

Particulars

This column is used for recording the details of the business transactions. As we are familiar with the fact that every transaction has got double effect and there are always two or more accounts to be debited and credited. We write the name of account to be debited and also write  'Dr.' against the account. The account to be credited is written below the account to be debited. The credit account is prefaced by the word 'To' and starts after leaving certain space, we don't write 'Cr.' against this account. In order to explain the transaction a bit of 'narration' is also written along with the entry.

Ledger Folio (L.F.)

Posting in the ledger accounts is done on the basis of journal entries. It is, therefore, necessary that there should be a certain reference to the page number of the ledger, where the account in the journal is being posted. This third column contains page numbers for easy reference.

Debit
This column contains the amount debited under a transaction.

Credit
This column contains the amount credited under a transaction.

Note: An important fact to keep in mind is that under any transaction the debit amount is same as credit amount and vice-versa, therefore the total of debit column of the journal should be the same as that of credit column. A mismatch between the two totals indicates either a calculation mistake or a mistake in recording a transaction.

Illustration: Based on the rules discussed earlier in the chapter, enter the following transactions in a journal.


Solution: The journal after the above transactions have been recorded will look like: