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Journal & Ledger

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Ms. Sunshine
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5 views2 pages

Journal & Ledger

Uploaded by

Ms. Sunshine
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Key Differences:

✔ Journal is called the original book of entry because the transaction is recorded first in the journal.
Ledger, on the other hand, is called the second book of entry because the transaction in the ledger
is transferred from journal to ledger.
✔ In a journal, the entry is recorded sequentially, i.e., as per the happenstance of the transaction.

✔ In the ledger, the entry is recorded account wise.

✔ The act of recording into the journal is called journaling.

✔ The act of recording into the ledger is called posting.

✔ In a journal, the narration is a must because otherwise, the entry would lose its value.

✔ In the ledger, the description is optional.

✔ In a journal, there is no need for balancing.

✔ In the ledger, balancing is a must at the end of the period.

Comparative Table
Basis for Comparison Journal Ledger
It is the first entry of financial transactions Ledger is recorded from the journal in a “T” format and
that are rightly summarized and recorded is the source of trial balance, income statement,
1. Meaning as per the double-entry system. and balance sheet.

Journal is more critical than ledger Ledger is dependent upon the correctness of a journal
because if it is done wrong, ledger can’t because if the journal is recorded right, the ledger will
2. Which is more
be done right. follow along.
important?

The format of a journal is simple, and we The format of the ledger is “T” format where we use to
include date, particulars, ledger folio, debit date, particulars, and amount on each side.
3. Format amount, and credit amount.

It is called the “book of original entry.” It is called the “book of the second entry.”
4. Label

The act of journaling is called journalizing. The act of ledger is called posting.
5. An act of recording

6. How is the entry In a journal, the entry is recorded as per In the ledger, the entry is recorded account-wise.
recorded? the date of the transaction.
Narration is a must to understand the The narration is optional.
7. Narration nature of the entry.
Balancing is not required in the journal. Balancing is mandatory in a ledger.
8. Necessity of balancing

Conclusion
Understanding the journal and ledger is of utter importance. If you can follow both well, the rest of the
accounting would seem very easy to you because you would be able to connect why an account debits and what
other credits.

1
However, if we compare, we would see that journal is more critical than ledger; because if there is an
error in the journal, it would be tough to find out since it is the book of original entry. Ledger is also crucial
because it is the source of all other financial statements.

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