Journal – Meaning, Format, Process and Types of Journal Entries

Journal - Meaning : Process and Types of Journal Entries. Journal is the first stage of recording business transactions. Book of original entry.



Journal – Meaning: Process and Types of Journal Entries. Journal is the first stage of recording business transactions. It is called as “Book of original entry” After receiving the source documents related to business transactions entries are recorded in the journal, which is called Journalizing the transactions. Journal provides base for whole Accounting process by initially recording the transactions. Recently we provide many article on accounting like – Accounting concepts – A comprehensive discussion, What is Debit and credit explained with accounting equation.

Process of Journal :

Format of Journal :

DateParticularsL.FDebit (Rs)Credit (Rs)

In journal all the transactions as and when occurred, recorded in chronological order. The format of Journal is as follows

(1) the First column is used for entering the date of the transaction. Usually, the year is written on the top of the column and the date along with month is written below.

(2) In particulars column names of the accounts involved in the transactions are written. First, the name of account which we have to Debit is entered, against that towards the end of the column ” Dr” is written. And in the next line after giving some space the name of thy account which we have to credit is entered with a word “To” before that.


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(3) In the particulars column after writing the names of accounts, below to them, an explanation is written with necessary details about the transactions. This is called as “Narration”.

(4)In the third column L.F means ledger folio which means the page number of the ledger in which the account is written is entered.

(5)In fourth column Debit amounts are written against respective account names.

(6) In the fifth column the amount to be credited is entered.

Types of Journal entries :

(1) Simple entry :

If there’s only one Debit and one credit then it is called as Simple entry.

for example : Cash paid for conveyance. Here only one Debit (Conveyance) and one credit (Cash) are there.

(2) Compound entry :

If there are more than one Debit or more than one credit in an entry then it’s called as Compound entry.

For example : If some goods were purchased against which some amount is paid immediately and the rest of the amount is not paid. Then two credits will be there (Cash and Creditors) and one Debit ( purchases) is there. So this is a compound entry.

Points to be kept in mind while Journalizing :

(1) While recording a compound entry it’s very important to ensure that whether individual break ups in either Debit or credit column in aggregate Matching with other aspect of the entry or not.

(2) When there are numerous transactions occurred in a day which are of similar nature then we used to record them in a single journal entry. For example when many cash payments were made on a single day in cash then all of them can be recorded in a single journal entry, which is called as composite entry. In such cases whether all the accounts of either Debit or credit should be checked property.

(3) In these days many business concerns are using softwares to maintain books of accounts where the system will capture the entry if we enter the basic details required like Debit account, amount and credit account, amount and Narration etc., In such cases we have to check whether the system is correctly capturing the journal entries or not.

Advantages :

(1) Journal forms basis for posting the entries in a ledger. This makes the work of the accountant to reduce the chance of errors and mistakes which may occur if the journal wouldn’t have been there.

(2) Journal records transactions in chronological order. So this character of Journal provides timely information required for various business reports.

(3) Each journal entry we record is supported by Narration, which is a precise explanation to know the details of transaction

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