What is Journal and Ledger? with Objectives (Definition)

Journal and Ledger both are the steps of accounting. Here is the definition of journal and ledger, with some of its Objectives and formats...

Journal

Journal is the first step of accounting. It is also the primary recording of financial transactions. The Word 'Journal' was originated from the French word 'Jour'. It Means 'day'. So an orderly daily record of transactions on a business is called Journal. As it is prepared at first in recording business transactions, it is also called a primary record. In the double-entry system, each transaction has a double effect with an equal amount on both aspects. So, one of the affected accounts is kept recorded as debit and the other as credit. The objectives of preparing a journal are to have an easy and detailed reference of transactions as well as to facilitate posting in the ledger.

Objectives or Purposes of Journal

To complete record of financial transaction
It helps to prepare the ledger accounts.
It is recorded in chronological order.
The basis for the preparation of the final account.
It provides data for the future.

Journal format:

Ledger

Ledger is the most important process of accounting. It is also known as the principal book. All the transactions recorded in the journal and other books finally take place in the ledger in a summarized form. The balance of accounts in the ledger becomes the basis in the preparation of the trial balance which is used to check the accuracy of records made during a certain period. As the final accounts are prepared by taking the balance of all the concerned accounts, the ledger becomes the main basis to meet the purpose of keeping accounts. Ex, How much is the assets, liability, income, expenditure, etc can be obtained from the Ledger book.

Objectives or Purposes of Ledger

It helps to prepare profit and loss.
To know about expenses and income.
It provides financial information.
It helps to prepare a balance sheet to show the financial position of the business.
To know about debtors and creditors.
To know the total sales and total purchase.

Ledger format:

"Journal is the first step of accounting."

"Ledger is the most important book of account. It is also called the principal book."

Comments

What do you mean by Bounded media and Unbounded media? (Definition)

Bounded and unbounded media are the transmission media which is used to transfer data from one destination to another through its means. Bounded Media The transmission media which uses to transmit the signal/data/information from one to another is known as bounded media. The data transmit rate is faster than the unbounded media. Bounded media is used to transmit data/information in short distance. It uses twisted pair cable, coaxial cable, and fiber optic cable as transmission media. All the computer and devices are physically connected in bounded media. Unbounded media The transmission media which uses wireless to transmit data/information/signal from one to another is known as unbounded media. The data transmit rate is slower than the bounded media. It is used for transmitting the data/signal/information for long-distance. It uses radio wave/microwave/communication satellite as transmission media. All the computer and devices aren't physically connected. Bounded m

What is Kite Flying? - Definition

Kite-Flying is a popular game. It is played in the autumn season. This season is fit for kite-flying, for it is neither much cold nor much hot. The harvesting season is over, and people have plenty of time at their disposal. Boys are very fond of kite-flying. Even grow-up men take part in it. The kite-flying season lasts two months. The kite is made of a square piece of paper. The paper is white or colored. there are two sticks pasted on this paper. One stick is straight and the other is curved. The straight stick is placed diagonally. The curved stick is placed nearly at the top of the straight stick, its ends touching two corners of the paper. The straight stick is tied with a piece of thread at two points just below its ends. This thread is joined to a long thread wound on a reel. The kite-flier holds the reel with his hands. He needs a helper for flying the kite. The helper catches the kite with his hand and goes to a long distance. He throws the kite up, and the flier pulls

What is LAN and WAN Networks? - Definition

LAN and WAN are the two types of computer network on the basis of geographical area coverage. Both are different from each other. Here is the definition of both networks. LAN (Local Area Network) The interconnection within room or building is known as LAN (Local Area Network). The data transmission rate is faster than WAN. Most of the LAN is built with relatively cheap hard drives like Ethernet cables, network adapters, and hubs. LAN has higher security to resources of the network. It is more easy to manage and operate. It can operate at a speed of 100mbps. There is lack of backup compares to WAN in LAN. It is only limited for short distance. The network structures of LAN is in Homogenous form. WAN (Wide Area Networking) The interconnection within a country or between neighbor countries and within a continent is known as WAN (Wide Area Networking). The data transmission rate is slower than the LAN. WAN use much expensive software than LAN. It helps to send data/information

What How ANS

Search This Blog