what are the objectives (purpose) of Journal in Accounting?

 Let us see, as to, what are the main objectives or purpose of preparing a Journal in accounting? Also, let's see how this daybook is useful in recording business transactions as well.

What is Journal in Accounting? Its meaning, definition, nature & scope:

It is the book of primary entry where the business transactions are recorded primarily in this book. The entry made in this book is called a journal entry. All the business transactions are first recorded in this book in chronological order or date wise. It is the book of original entry where the business transactions are recorded in a format of debit and credit. 

        Journalising: All the business transactions are recorded in this book in chronological order. The process of recording transactions in the journal is called journalising. The transactions are recorded in this book as per the double-entry system of accounting which has dual aspect such as debit aspect and credit aspect.

What are the main objectives ( purpose) of Journal in Accounting?

1. The main objective is to record all the business transactions in chronological order or date wise. The first & foremost important objective of the Journal is recording all the financial transactions that occur in a business entity. All transactions that occur in any business are recorded in this daybook on daily basis in chronological order or date wise. Each transaction is recorded using the double-entry system of bookkeeping. Narration is used to explain the description or nature of the transaction in each entry.

2. Journal is the legal evidence that all the business transactions are recorded and required books of accounts have been maintained as per the legal requirements of the various laws. Maintaining this daybook implies that a business entity complies with the legal requirements and various laws of the state as well.

3. The basic purpose of preparing the Journal is to facilitate the preparation of the Ledger. A ledger is a bound book that contains all the relevant ledger accounts of debtors, suppliers, expenses, incomes, liabilities, assets, capital. Each ledger account has T shape where the left side is denoted as Dr (debit) and the right side as Cr (credit). All these ledgers accounts are balanced where all these balances are taken to trial balance and financial statements. Thus, it also helps in the preparation of Leger.

4. Journal gives the complete information of all the transactions that occurred in the business. All the transactions are accounted for and recorded in a systematic manner. We have supports, documents, invoices, bills for all the transactions that occurred in the business. We also use Narration for each transaction recorded as an explanation to the transaction.

5. The main purpose of preparing a Journal is to show that all the transactions are recorded by complying with the golden rules of the double-entry system of bookkeeping. This implies that all the transactions are recorded using a systematic and logical method of bookkeeping called the double-entry system.

          

                   Under the Double Entry System of Accounting, all the business transactions are recorded as Debit and Credit. These are the two terms used as Debit and Credit. It means the business transactions are divided into two aspects as Debit and Credit. For every Debit, there is corresponding Credit. The sum of the Debit amount is equal to the Credit amount. The debit is receiving aspect and credit is the giving aspect and vice versa

Conclusion

Thus it is clear, as to, what are the objectives (purpose) of Journal in Accounting? The first & foremost important objective is recording all the financial transactions that occur in a business entity. All transactions that occur in any business are recorded in this daybook on daily basis in chronological order or date wise. Each transaction is recorded using the double-entry system of bookkeeping. It also helps in preparing the Ledger.

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