Term Paper on Journal and Ledger | Accounting

Here is a compilation of term papers on ‘Journal and Ledger’ for class 11 and 12. Find paragraphs, long and short term papers on ‘Journal and Ledger’ especially written for school and college students.

Term Paper on Journal:

The word “Journal” has been derived from the French word “JOUR” is meaning daily records. The journal records all daily transactions of a business in the order in which they occur. A journal may, therefore, be defined as a book containing a chronological record of transactions.

It is the book in which the transactions are recorded first of all under the double entry system. Thus, journal is a book of the original records/books of prime entry. The recording of a transaction in the journal is called journalizing. The record of a business transaction in journal is called a journal entry.

When the business transactions take place, the first step is to record the same in the books of original entry or subsidiary books or books of prime or journal. Thus journal is a simple book of accounts in which all the business transactions are originally recorded in chronological order and from which they are posted to the ledger accounts at any convenient time. Journalising refers to the act of recording each transaction in the journal and the form in which it is recorded, is known as a journal entry.

Advantage of Journal:

The following are the inherent advantages of using journal, though the transactions can also be directly recorded in the respective ledger accounts:

1. As all the transactions are entered in the journal chronologically, a date wise record can easily be maintained.

2. All the necessary information and the required explanations regarding all transactions can be obtained from the journal.

3. Errors can be easily located and prevented by the use of journal or book of prime entry.

The specimen journal is as follows:

The journal has five columns, viz.:

(1) Date;

(2) Particulars;

(3) Ledger Folio;

(4) Amount (Debit); and

(5) Amount (Credit)

And a brief explanation of the transaction by way of narration is given after passing the journal entry.

1. Date:

In each page of the journal at the top of the date column, the year is written and in the next line, month and date of the first entry are written. The year and month need not be repeated until a new page is begun or the month or the year changes. Thus, in this column, the date on which the transaction takes place is alone written.

2. Particulars:

In this column, the details regarding account titles and description are recorded. The name of the account to be debited is entered first at the extreme left of the particulars column next to the date and the abbreviation ‘Dr.’ is written at the right extreme of the same column in the same line.

The name of the account to be credited is entered in the next line preceded by the word “To” leaving a few spaces away from the extreme left of the particulars column. In the next line immediately to the account credited, a short about the transaction is given which is known as “Narration”. “Narration” may include particulars required to identify and understand the transaction and should be adequate enough to explain the transaction.

It usually starts with the word “Being” which means what it is and is written within parentheses. The use of the word “Being” is completely dispensed with, in modern parlance. To indicate the completion of the entry for a transaction, a line is usually drawn all through the particulars column.

3. Ledger Folio:

This column is meant to record the reference of the main book, i.e., ledger and is not filled in when the transactions are recorded in the journal. The page number of the ledger in which the accounts are appearing is indicated in this column, while the debits and credits are posted on the ledger accounts.

4. Amount (Debit):

The amount to be debited along with its unit of measurement at the top of this column on each page is written against the account debited.

5. Amount (Credit):

The amount to be credited along with its unit of measurement at the top of this column on each page is written against the account credited.

Subdivision of Journal:

When innumerable number of transactions takes place, the journal, as the sole book of the original entry becomes inadequate. Thus, the number and the number and type of journals required are determined by the nature of operations and the volume of transactions in a particular business.

There are many types of journals and the following are the important ones:

1. Sales Day Book:

To record all credit sales.

2. Purchases Day Book:

To record all credit purchases.

3. Cash Book:

To record all cash transactions of receipts as well as payments.

4. Sales Returns Day Book:

To record the return of goods sold to customers on credit.

5. Purchases Returns Day Book:

To record the return of goods purchased from suppliers on credit.

6. Bills Receivable Book:

To record the details of all the bills received.

7. Bills Payable Book:

To record the details of all the bills accepted.

8. Journal Proper:

To record all residual transactions which do not find place in any of the aforementioned books of original entry?

Term Paper on Ledger: 

Ledger is a main book of account in which various accounts of personal, real and nominal nature, are opened and maintained. In journal, as all the business transactions are recorded chronologically, it is very difficult to obtain all the transactions pertaining to one head of account together at one place.

But, the preparation of different ledger accounts helps to get a consolidated picture of the transactions pertaining to one ledger account at a time. Thus, a ledger account may be defined as a summary statement of all the transactions relating to a person, asset, expense, or income or gain or loss which have taken place during a specified period and shows their net effect ultimately.

From the above definition, it is clear that when transactions take place, they are first entered in the journal and subsequently posted to the concerned accounts in the ledger. Posting refers to the process of entering in the ledger the information given in the journal.

In the past, the ledgers were kept in bound books. But with the passage of time, they became loose-leaf ones and the advantages of the same lie in the removal of completed accounts, insertion of new accounts and arrangement of accounts in any required manner.

Ruling of Ledger Account:

The ruling of a ledger account is as follows:

Type-1:

Type- 2:

Ledger Account Type 1 is followed in almost all the business concerns, whereas Type 2 is followed only in banking institutions to save space, time and clerical work involved.

Sub-Division of Ledger:

In a big business, the number of accounts is numerous and it is found necessary to maintain a separate ledger for customers, suppliers and for others.

Usually, the following three types of ledgers are maintained in such big business concerns:

(i) Debtors’ Ledger:

It contains accounts of ail customers to whom goods have been sold on credit. From the Sales Day Book, Sales Returns Book and Cash Book, the entries are made in this ledger. This ledger is also known as sales ledger.

(ii) Creditors’ Ledger:

It contains accounts of all suppliers from whom goods have been bought on credit. From the Purchases Day Book, Purchases Returns Book and Cash Book, the entries are made in this ledger. This ledger is also known as Purchase Ledger.

(iii) General Ledger:

It contains all the residual accounts of real and nominal nature. It is also known as Nominal Ledger.