Journal, its characteristics , Importance, Journal is known as the subsidiary book of Accounts,

 What is a Journal ? Explain its characteristics ?

A journal records all the routine transactions of a business in a chronological order. It is the book in which the transactions are recorded under the double entry system. Thus, a journal is the book of the original record.

The book on which these transactions are first recorded chronologically by means of a debit and credit analysis with proper explanation is called a journal.


If we analyze the definition of a journal, we will find the following 8 important features of the Journal:

  1. Journal is the primary book of accounts.

  2. It is a daily book of accounts.

  3. Journal is an associate book of accounts.

  4. It records each transaction through a debit-credit analysis.

  5. It records each transaction with an explanation.

  6. Each transaction is recorded by means of a debit and credit analysis of the same amount of money in the journal.

  7. Journal is recorded in a specific table.

  8. The transaction is recorded in the Journal in a chronological manner.

Necessity or Importance of Journal

The importance of the Journal is immense. Basically, the process of accounting is started through the Journal.

The importance of the Journal is as follows:

  1. Journal is a permanent record of accounts.

  2. The nature of the transaction is known through Journal.

  3. Journal Maintains the continuity of the transaction.

  4. The transactions saved in Journal serve as future references.

  5. Journal acts as accounting information.

  6. It prevents fraud and cheats.

  7. Journal helps to resolve future disputes. 

 

Q2. Why is Journal called the subsidiary book of Accounts?

Journal is the daily, primary, and subsidiary book of accounts. That is, when a business transaction takes place, the book on which the first transaction is recorded, with proper reason, is called Journal.

Journal is called the subsidiary book of accounts which serves as the basis for determining the final result in Accounting.

The following are the appropriate reasons for calling Journal a subsidiary book of accounts:,

  1. Transactions are recorded first in a Journal book then transferring those in Ledger, as a result, Ledger becomes easier.

  2. In the journal, transactions are recorded in a chronological manner and in the future it can be used as proof of future evidence.

  3. In journal transactions are recorded with proper explanation, in the near future if any issue arises from the transaction, its explanation can be obtained from the journal.

  4. Journal ensures the accuracy of the Ledger.

  5. Transactions that transfer from Journal to Ledger do not need to be re-analyzed as a result, because the journal reduces the error and faults.

  6. Journal provides the idea of daily income and expenditure of the business.

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