1.0 INTRODUCTION
Journal is derived from the French word "Jour" which
means a day. Journal, therefore, means a daily record of business transactions.
Journal is a book of original entry because transaction is first written in the
Journal from which it is posted to the ledger at any convenient time.
2.0 OBJECTIVES
At the end of this note, you should be able to:
• define a Journal
• explain the specimen of a journal
• explain the types of journal
• explain the users of journal
• illustrate the style of the journal proper.
3.0 MAIN CONTENT
3.1 Journal-Meaning, Specimen and Types of Journal
3.2 Meaning of Journal
The journal is a book in which transactions are entered when
they occur, and in the order in which they occur, so as to provide a suitable
record from which the ledger entries can be made at some later and more
convenient point of time.The Journal is primarily a book of convenience, while
the ledger is often described as a book of classification.
3.3 Specimen of a Journal
The journal contains columns for the date, particulars of
entry, ledger folio and debit and credit money columns.
Note:
I It will be observed that the rulings as shown above are
exactly like one side of the cash book.
II The money columns are not for cash and bank accounts but
for debit and credit according to the side a transaction will be posted in the
ledger.
The style of the journal should be very carefully studied.
The following points should be noted.
1. The transactions are dated, and are entered in
chronological order, i.e. date order.
2. The debit and credit entries are on successive lines.
3. The abbreviation "Dr" written after the name of
the account to be debited and near the folio column.
4. The word "To precedes the name of the account to be
credited.
5. The credit entry is indented i.e. a space is left somewhat
similar to the commencement of a new paragraph. This placing of the credit
entries further to the right hand side distinguishes them from the debit
entries.
6. The figures in the folio column are the number of the
account to which the items have been posted in the ledger.
7. There is a separate cash column for debit and credit entry
for the same amount made in respect of each transaction. The total of the debit
column must agree with total of the credit column.
8. Immediately below the entries, brief narration is given
about the
transactions.
Notes:
I. Although brief, this narration must be sufficient to convey
all the essential particulars of the transaction, when it is read in
conjunction with the entries to which it relates.
II. Note that all debit entries in the journal must be posted
to the debit side of the appropriate ledger accounts while all credit entries
must be posted to the credit side of the appropriate ledger accounts.
III. Note that there are other types of journal apart from the
journal proper described above. These are known as subsidiary books of Accounts
or entries, examples are:
(a) Sales day book- used to record goods sold on credit
(b) Purchases day book- used to record goods bought on
credit
(c) Returns outwards journal — used for purchases
returns i.e. used to record goods previously bought by the business, now return
back to the seller as a result of one fault or the other.
(d) Returns Inwards Journal — used for sales returns
i.e. used for recording goods already sold now return back to the business as a
result of certain faults.
All these will be treated in details at a later note.
(e) Cash Journal or Cash Book: The cash book which is
book of original entry and part of the principal book of account ledger, is
used for recording all cash transactions both cash receipt and cash spent.
You should note that these subsidiary books are also referred
to as books of original entry. They are subsidiary to ledger hence why ledger
is a principal book of account..
3.4 Illustration
Journalize the following transactions in the book of a sole
trader.
N
Feb. 1 Started business with cash 45,000 =
“ 1 Paid into Bank 25,000 =
“ 2 Goods purchased for cash 15,000 =
“ 3 Purchased furniture by cheque 5,000 =
“ 5 Sold goods for cash 6,000 =
“ 8 Sold goods to Ayo 4,000 =
“ 10 Goods Purchased on credit from C.S.A. 7,000 =
“ 12 Goods returned to CSA 1,000 =
“ 15 Sold goods to Alhaji Raji Bello for cash 2,500 =
“ 18 Cash received from Ayo 4,000 =
“ 21 Withdrew from Bank for private use 1,000 =
“ 21 Drew from bank for business use 5,000 =
“ 25 Paid Telephone bill 400 =
“ 28 Cash paid to CSA 6,000 =
“ 28 Paid cash for salaries 2,500 =
Journal Entries
4.0 CONCLUSION
In practice, transaction is first entered in the journal
before it is posted to the ledger at any convenience time. So journal is a book
of convenience and it can also be referred to as book of original entry.
5.0 SUMMARY
The Journal is a book in which transactions are entered when
they occur, and in the order in which they occur. The Journal is primarily a
book of
convenience, while the ledger is often described as a book of
classification.
Apart from the Journal proper, there are other types of
Journal. These are known as subsidiary books of account, e.g. Sales day book,
Purchases day book, Returns Outwards Journal, Returns Inwards Journal, and cash
Journal. All these subsidiary books are also referred to as books of original
entry.
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