what is difference between journal and ledger??
Answers
Answer:
Journal
Ledger
Definition
Journal is a subsidiary book of account that
of account that classifies transactions transactions recorded in a journal.
records
Ledger is a principal book
Order
The journal
transactions get recorded in chronological order on the day of their
occurrence
The ledger classifies the
transactions from the journal under the respective accounts to which they are related
Explanation
Each journal
The ledger accounts do
entry has a
detailed
narration of the
transaction
not have a each
detailed narration of
transaction.
The journal does not reveal the total results of a transaction
The Ledger
accounts help reveal the result of transactions for a particular account
Trial Balance
The journal
cannot help prepare the Trial
Balance directly Trial Balance
Financial Statements
The journal does not have a direct role in the preparation of financial statements e Profit and Loss Account or Balance Sheet.
The ledger helps to
prepare the
The balances from different ledger
accounts help to prepare
financial statements like Profit and Loss Account of Balance Sheet.
Opening Balance
A journal does
not have an
opening balance and it is only concerned with the current transactions that occur on a day to-day basis
Some ledger accounts have an opening balance, which is the closing balance from the previous year
Explanation:
hope it helps
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The main differences between journal and ledger are as given below :-
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journal is a subsidiary book of account that records transactions.
ledger is a principal book of account that classifies transactions recorded in a journal.
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The journal transactions get recorded in chronological order on the day of their occurrence.
The ledger classifies the transactions from the journal under the respective accounts to which they are related.
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Each journal entry has a detailed narration of the transaction.
The ledger accounts do not have a detailed narration of each transaction.
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The journal does not reveal the total results of a transaction.
The Ledger accounts help reveal the result of transactions for a particular account.
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The journal cannot help prepare the Trial Balance directly.
The ledger helps to prepare the Trial Balance.
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The journal does not have a direct role in the preparation of financial statements like Profit and Loss Account or Balance Sheet.
The balances from different ledger accounts help to prepare financial statements like Profit and Loss Account or Balance Sheet.
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A journal does not have an opening balance, and it is only concerned with the current transactions that occur on a day-to-day basis.
Some ledger accounts have an opening balance, which is the closing balance from the previous year.
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Although there are significant differences between Journal and Ledger, both have a critical role in accounting. They have a vital role to play when preparing financial statements like Profit and Loss Account or Balance Sheet.