Classwork Series and Exercises {Financial Accounting – SS1}: The Journal

Financial Accounting, SS 1, Week 7

Topic: The Journal (Principal Journal)

Contents

1. Meaning of journal
2. Advantages of journal
3. Uses of journal proper
4. Classes of entry
5. Format of a journal

Meaning of Journal

The journal is a book of original entries or prime entries which recorded transaction in chronological order that is day by day recording of transactions arranged according to when something happened.

Journal can equally be referred to as a daily record into which transactions are entered and classified as DR and CR before they are posted to the ledgers. The journal has columns for date,particulars,folio,debit and credit. The entries are recorded and explanation will be given to show the nature of the transactions, this is referred to as narration.

Advantages of Journal

1. Its main purpose is to provide a convenient record of transaction in chronological order.
2. It reduces the risk of omission of transactions.
3. The explanations of the entries are made known by the journal.

Uses of Journal proper.

1. Opening entries
2. Closing entries
3. Correction of errors
4. Transfer between account.
5. Purchase of fixed asset n credit
6. Sales of fixed asset on credit
7. To answer questions on double entry principle

Classes of Entries

The entries in the principal journal may be simple or composite.

1. Simple entries: Only two accounts are involved.one account will be debited and another credited.
2. Composite entries: There may be several accounts to be debited and only one account to be credited and vice versa

Format of Journal Entry

Date	Particulars	Folio	Debit	Credit
	Name of account to be debited.Name of account to be credited.Narrations.		X	X