CLASS 11th (NOTES) CHAPTER 8 - JOURNAL

Recording of Daily transaction in the form of Debit and Credit is "Jornal". it is basic book of accounting also called Day Book. It is often referred to as the "book of original entry". Trader records his daily transactions in chronological order in the journal.

Rules of Debit and Credit

Based on Traditional Classification of Accounts			Based on Modern Classification of Accounts
Types of Account	Debit	Credit	Types of Account	Debit	Credit
1. Personal A/c	The Receiver	The Giver	1. Asset A/c	Increase	Decrease
2. Real A/c	What comes in	What goes out	2. Liability A/c	Decrease	increase
			3. Capital A/c	Decrease	increase
3. Nominal A/c	Ali Expenses and Losses	All Incomes and Gains	4. Revenue A/c	Decrease	Increase
			5. Expense A/c	Increase	Decrease

Format of a Journal Entry

The format of Journal is as follows:

1. Date

In this column, the transaction date is written.

2. Particulars

According to Dual Aspect Concept of accounting, both debit and credit aspects of a transaction are recorded. Name of the account to be debited is written first followed by the word ‘Dr.’ written close to the Right-hand margin line, while the name of the account, to be credited is written in the next line preceded by the word ‘To’.

3. Ledger Folio (L.F.)

In this column the number of Ledger page is written to which the debit and credit aspects of the transaction is posted.

4. Debit Amount

In this column, the amount debited is written.

5. Credit Amount

In this column, the amount credited is written.

6. Narration

A brief description of the transaction is also written after the entry.

Note: All the columns, except the Ledger Folio (L.F.) column, are completed at the time of Journalising. The Ledger Folio (L.F.) is written at the time of posting the transaction in Ledger Accounts.

Format:

Date / Year |            Particulars               |L.F| Debit(₹)| Credit(₹)
---------------------------------------------------------------------
MM/DD       | Account to be Debited                |   | Amount  |
            |      Account to be Credited          |   |         | Amount
            | Brief Description of the Transaction |   |

Example Entry:

2024        | Account Title and Description        | L.F| Dr. (₹)   | Cr. (₹)
---------------------------------------------------------------------
01/01       | Machinery A/c              Dr.       |   | 12,000     |
            |      To Cash                         |   |            | 12,000
            | (Being Machinery Purchased for cash) |   |

Breakdown of the Example:

1. Date:

   • 01/01/2024: The date when the transaction occurred.

2. Accounts:

   • Machinery A/c   (Debit): The account to be debited, indicating an increase in office supplies.
   • To Cash A/c (Credit): The account to be credited, indicating a decrease in cash.

3. Amounts:

   • Debit: 12,000
   • Credit: 12,000

4. Narration:

   • Purchased Furniture for cash: A brief explanation of what the transaction was about.

Steps to Record a Journal Entry:

1. Identify the Accounts Affected: Determine which accounts are impacted by the transaction.
2. Classify the Accounts: Decide which account will be debited and which will be credited.
3. Enter the Date: Record the date of the transaction.
4. Record the Debit Entry: Enter the account to be debited and the corresponding amount.
5. Record the Credit Entry: Enter the account to be credited and the corresponding amount.
6. Provide a Description: Include a brief description or memo explaining the transaction.

Summary

The journal format ensures that all financial transactions are recorded systematically and comprehensively. This helps maintain accurate financial records and provides a clear audit trail for future reference.