What Are The Characteristics And Advantages Of Journal In Accounting System?


2 Answers

Bilal Ahmad Profile
Bilal Ahmad answered
Journal has the following characteristics:
a) Journal is the first successful step of the Double Entry system. A transaction is recorded first of all in the Journal. So, Journal is called the book of Original Entry.
b) A transaction is recorded on the same day it takes place. So, Journal is also called a Day Book.
c) Transactions are recorded chronologically. So, Journal is called Chronological Book.
d) For each transaction the names of the two concerned accounts indicating which is debited and which is credited, are clearly written in two consecutive lines. This makes ledger-posting easy. That is why Journal is called "Assistant to Ledger".
e) Narration is written below each entry.
f) The amount is written in the last two columns, debit amount in Debit column and credit amount in Credit column.

These are the advantages of Journal:
a) Each transaction is recorded as soon as it takes place. So there is no possibility of any transaction being omitted from the books of account.
b) Since the transactions are kept recorded in Journal chronologically with narration. it can be easily ascertained when and why a transaction has taken place.
c) For each and every transaction which of the two concerned accounts will be debited and which account credited, are clearly written in Journal. So, there is no possibility of committing any mistake in writing the Ledger.
d) Since all the details of transactions are recorded in Journal, it is not necessary to repeat them in Ledger. As a result Ledger is kept tidy and brief.
e) Journal shows the complete story of transaction in one entry.
f) Any mistake in ledger can be easily detected with the help of Journal.
Sajid Majeed Profile
Sajid Majeed answered
Because of subdivision the books cannot be bulky and hence there will be no difficulty in handling them.Accounting work is divided amongst a large number of employees. So work is done nicely and promptly and no work is left in arrear.Each employ can be held responsible for mistakes committed by him. This serves as caution and care to the employees.

The efficiency of employees increases, because of the division of labour.By keeping the book under the custody of different employees the chances of fraud and defalcation are minimised.In small business concerns only one journal and one ledger may serve the purpose, because the number of transactions is very small. But in large business concerns the number of transactions are numerous, just one journal and one ledger will not do the job.

That will cause much inconvenience if we have only one journal in a large scale business, it is not possible for one book-keeper to record all the transactions in time. On the other hand, it will not be possible for more than one person to use the same journal simultaneously with the result that the accounting work will fall in arrears.
Thus in a large business concern a journal is divided into parts so that several clerks could work at the same time. This is known as 'Subdivision of Journal'.

Answer Question