Difference between primary and secondary books of accounts
Difference Between Journal and Ledger (with Comparison Chart) - Key DifferencesPost a Comment This blog is meant for students of Accoutancy and Accountancy enthusiasts. Please do not spam here because if you do so, your comment will be deleted. Any student of accountancy is familiar with two things of the subject,namely "Journal" and "Ledger". However, very few students are aware of the concepts underlying them. This post is aimed at clearing that very concept. First we must understand the role of journal and ledger in the accounting cycle. Accounting for any transaction begins with passing an entry in the journal.
Difference Between Journal and Ledger
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Double entry system of bookkeeping says that every transaction affects two accounts. There is a proper procedure for recording each financial transaction in this system, called as accounting process. The process starts from journal followed by ledger, trial balance, and final accounts. Journal and Ledger are the two pillars which create the base for preparing final accounts. The Journal is a book where all the transactions are recorded immediately when they take place which is then classified and transferred into concerned account known as Ledger.
Every business performs various operational activities and by this operational activities, there arise different types of transactions in the business. As per accounting standards and double entry system rules, different transactions have different treatment in the books of accounts. There are various books of accounts in which journal and ledger are the most important for every business. This article concentrates on communicating the difference between Journal and Ledger books. Every business records transaction is recorded in a sequential way in the journal.
An alternative introduction is under the journal entry. A journal is known as primary book. Books of Prime Entry are a more efficient variation on double-entry accounting. In basic double entry, a double entry is made in the general journal, which is posted in the general ledger accounts. Originally, the Venetian method also suggested a preceding diary step, which makes sense as no thinking is required in double entry, so it may have been faster. In a manual system, books of prime entry act as the speed entry step: instead of trying to remember which accounts to debit and which to credit, and writing the names down for each entry for each transaction in the general journal, the general journal is reserved for infrequent accrual entries; the more frequent cash entries, and the most frequent accrual entries are divided into specialized journals of cash receipts and cash payments; credit sales journal and credit purchases journal credit means 'on credit' here ; and for medium frequency accrual entries, sales returns and purchase returns journal.