Journal : The Original Book Of Entry
Now, we are in good position to record various business transaction in proper books of accounts. According to double entry system transaction are recorded in the books of accounts in two stages:
First stage → Journal
Second stage → Ledger
The flow of accounting information from the time a transaction take place to its, recording in the ledger may be illustrated as follows:
Business TRANSACTION occurs
↓
Business DOCUMENT prepared
↓
Entry recorded in JOURNAL
↓
Entry posted to LEDGER
The initial record of transaction is evidenced by a business such as invoice , cash voucher etc.
Transactions are first recorded in journal and thereafter posted to the two or three concerned accounts in the ledger
Definition
The word "journal" has been derived from the french word "jour". Jour means day. So journal means daily. Transactions are recorded daily in journal and hence it has been named so. As soon as a transaction take place its debit and credit aspects are analysed and first of all recorded chronologically in a book together with its short description. This book is known as "journal". Thus we see that the most important function of journal is to show the relationship between the two accounts connected with a transaction. This facilitates writing of ledger. Walter Griorson has rightly described the book as "simply assistant of ledger".
Transactions are first of all recorded in Journal, so it is called BOOK OF ORIGINAL ENTRY
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