journal

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Journal

Human memory is short and events can't be stored in mind for a long time. Therefore business firms and government offices keep records of transaction in book. The books, which are used for keeping record of transaction, are called Books of Account. Journal is also one of the account books. It is the first book used to keep record of transaction. In this book Transaction are recorded in chronological order showing dual effects debit and credit. This book is also known as memory book or primary book or book of original entry.

Importance /Advantages of Journal

1. Record in journal is kept in chronological order. Therefore there is no change of omitting any transaction.

2. Debit and credit amounts are written side by side. It minimizes the chance of entering wrong amount.

3. Reason of debit and credit of accounts can be known from he narration.

4. Factuality of checking amounts posted in concerned account in ledger.

5. Factuality to identify accounts to be debited and credited.

6. Benefit of making all transaction registered in a book.

Rules of debit and credit

Rules of Account

Rules of increase and decrease

1. Rules of Account

There are three types of Account. They are i. Personal account

ii. Real account

iii. Nominal account

a. Personal account

Accounts recording transaction related to individual or firms or company are known as personal account. Personal account in business is opened when credit transactions take place. From this account trader can know the amount to be received and paid. The rule of debit and credit under the account is - Debit the receiver and Credit the giver.

b. Real account

It is related to assets to properties. The account related to cash, furniture, goods, vehicles, machineries ets is called real account. The rule of debit and credit under this account is debit what comes in and credit what goes out.

c. Nominal account

It is related to incomes and expenses or gains and loses. Items of nominal account are salaries, wedges allowances, discount, rent, commission, interest etc. When expenses and losses occur for nominal heads, they are debited and credited when there are gains and income. The rule of debit and credit under this account is -debit all the losses and expenses and credit all the gains and profits.

	Web community \| home
	Web community \| home Journal Human memory is short and events can't be stored in mind for a long time. Therefore business firms and government offices keep records of transaction in book. The books, which are used for keeping record of transaction, are called Books of Account. Journal is also one of the account books. It is the first book used to keep record of transaction. In this book Transaction are recorded in chronological order showing dual effects debit and credit. This book is also known as memory book or primary book or book of original entry. Importance /Advantages of Journal 1. Record in journal is kept in chronological order. Therefore there is no change of omitting any transaction. 2. Debit and credit amounts are written side by side. It minimizes the chance of entering wrong amount. 3. Reason of debit and credit of accounts can be known from he narration. 4. Factuality of checking amounts posted in concerned account in ledger. 5. Factuality to identify accounts to be debited and credited. 6. Benefit of making all transaction registered in a book. Rules of debit and credit Rules of Account Rules of increase and decrease 1. Rules of Account There are three types of Account. They are i. Personal account ii. Real account iii. Nominal account a. Personal account Accounts recording transaction related to individual or firms or company are known as personal account. Personal account in business is opened when credit transactions take place. From this account trader can know the amount to be received and paid. The rule of debit and credit under the account is - Debit the receiver and Credit the giver. b. Real account It is related to assets to properties. The account related to cash, furniture, goods, vehicles, machineries ets is called real account. The rule of debit and credit under this account is debit what comes in and credit what goes out. c. Nominal account It is related to incomes and expenses or gains and loses. Items of nominal account are salaries, wedges allowances, discount, rent, commission, interest etc. When expenses and losses occur for nominal heads, they are debited and credited when there are gains and income. The rule of debit and credit under this account is -debit all the losses and expenses and credit all the gains and profits.