Difference between Journal and Ledger

Journal is derived from the French word Jour, which means daily records. All the business transactions are first recorded in
the Journal, therefore, it is also known as the “Book of Original Entry or Book of Prime Entry”. In this book, we record the business transactions in chronological order which means in the order (or date) of their occurrence. In the Journal, business transactions are recorded in the form of an entry (having effects on two sides). This entry is popularly referred to as Journal Entry. Whereas Ledger is the next stage after Journal. After recording all the entries in the Journal, the next step is the posting of the transaction in the respective accounts. These accounts are collectively known as Ledgers.

Difference between Journal and Ledger

Type of bookBook of Original EntryBook of Final Entry
PreparedIt is prepared from the source documentsIt is prepared from the Journal
ObjectiveRecording all the transactions at one place in chronological order.After recording, all the transactions are posted to their respective accounts.
StageIt is the first stage of recording a transaction.It is the second stage that comes after recording in Journal.
NarrationNarration is a part of each entry.No narration is written.
BalancingBalancing is not done in Journal.Ledgers accounts are balanced.
Preparation of
Final Accounts
Final Accounts cannot be prepared on the basis of the Journal.Final Accounts are prepared on the basis of Ledgers.
Test of AccuracyThe accuracy of the Journal cannot be tested.Its accuracy can be tested by preparation of Trial Balance.
J.F/L.F.Page Number of Ledger i.e. Ledger Folio (L.F.) is written in this book.Page Number of Journal or Subsidiary books i.e. Journal Folio (J.F.) is written in Ledger.

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Meaning of Debit and Credit

Meaning of Debit and Credit – Under the Double Entry System of accounting, each business transaction is recorded with dual aspects that mean debit and credit aspects.

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