Journal is a book of original entry in which all business transactions are recorded systematically. Journal means a book which records all monetary transactions on daily basis. A journal is defined as the book of original entry while the definition is more appropriate when the transactions were written in a journal before manually posting them to their respective accounts. There are a variety of journals like the sales journal, purchases journal, cash receipts journal, cash disbursements journal, and general journal.

Features of Journal:

  1. It is a book of original entry because transactions is recorded at first stage ij this book
  2. It is known as day book or diary because transactions are recorded in it on day to day basis as and when they take place.
  3. The journal is only s subsidiary book, subordinate to the ledger which is the principal book of
  4. The journal gives a complete picture of each business transactions and thus , maintains the identity of the transactions.
  5. The Journal reflects the relation that exists between two aspects (debit & credit) involved in a transactions.

Functions of Journal:

· Analytical Function:

At the time of recording a transaction in the journal, each transaction is analyzed into the debit aspect and the credit aspect. This helps in understanding how each transaction will affect the business.

· Recording Function: 

This is a business language that helps to keep the record of the transactions based on the principles. The recording entry is supported by a brief narration, which explains every transaction in a layman’s language.

· Historical Function: 

The Journal book contains a chronological record of the recording of transactions for future references. This will further help the business to analyze their past performance and chalk out their future possibility.

Limitations of Journal :

  1. As the numbers of transactions in a business are large, journal becomes bulky and voluminous
  2. Journal does not provide information on prompt basis
  3. As the journal can only be handled by one person, it does not facilitate the installation of an internal check system
  4. Cash transactions are usually recorded in a separate book called ‘cash book’. Those transactions are not recorded in journal.
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