define the term journal and explain its characteristics.
Answers
The word “journal” has been derived from the French word “jour”. Jour means day. So journal means daily. Transactions are recorded daily in journal and hence it has been named so. It is a book of original entry to record chronologically (i.e. in order of date) and in detail the various transactions of a trader. It is also known Day Book because it contains the account of every day’s transactions.
CHARACTERISTICS OF JOURNAL:
Journal has the following features:
1) Journal is the first successful step of the double entry system. A transaction is recorded first of all in the journal. So the journal is called the book of original entry.
2) A transaction is recorded on the same day it takes place. So, journal is called Day Book.
3) Transactions are recorded chronologically, So, journal is called chronological book
4) For each transaction the names of the two concerned accounts indicating which is debited and which is credited, are clearly written in two consecutive lines. This makes ledger-posting easy. That is why journal is called “Assistant to Ledger” or “subsidiary book”
5)Narration is written below each entry.
6)The amount is written in the last two columns – debit amount in debit column and credit amount in credit column.