A Journal is that primary books of accounts in which transactions are originally recorded in a chronological order, i.e.

, as and when they occur.

The transfer of Journal entry to a ledger account is called Posting.
Dr. Smita Sahoo

Journal and Ledger

Characteristics of a Journal
It contains day-to-day transactions It is a basic book of original entry It records both the debit and the credit aspects of a transaction A Journal is a record of complete detail of a transaction in one entry.

Classification of accounts-traditional approach

ACCOUNTS

Personal A/c

Impersonal A/c

NATURAL

ARTIFICIAL

REPRESENTATIVE

REAL

NOMINAL

Classification of accounts-modern approach

ACCOUNTS

Assets a/c

Liabilities A/c

Capital A/c

Revenue A/c

Expenses A/c

Based on traditional Classifications of Accounts

Types of Accounts 1. Personal Account 2. Real Account 3. Nominal Account Debit The Receiver Credit The Giver

Rules of Debit and Credit

What comes in What goes out Expenses and Incomes and Losses Gains

Types of Debit Accounts 1. Assets Account Increase

Based on Modern Classifications of Accounts

Credit Decrease Increase Increase Increase Decrease

2. Liabilities Decrease Account 3. Capital Account Decrease 4. Revenue Account 5. Expense Account Decrease Increase

Ledger:
Book or register which contains, in a summarized and classified form, a permanent record of all transactions.

Personal Accounts shows how much money the firm owes to its creditors and the amounts to be recovered from the debtors. Real Accounts show the value of properties and also the value of stock. Nominal Accounts reflects the sources of income and also the amount spent on various items

Types of Accounts that are balanced

Personal and Real Accounts are balanced and Nominal Accounts are closed by transferring the amount to Trading or Profit and Loss Account.

Direct Expenses Vs. Indirect Expenses

Direct Expenses: These are the expenses which are incurred on the goods purchased till they are brought to the place of business for sale. These are debited to the Trading Account.

Indirect Expenses: These are the expenses which are incurred for the sales and distribution of the goods, office administration and financial charges. These expenses are debited to Profit & Loss Account.

Trial Balance:
A Trial Balance is a statement in which the debit and credit balances of all accounts are recorded with a view to ascertain the arithmetical accuracy of the books of accounts.