What is journal? Features, needs and functions of journal

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Journal 

The word 'journal' has been derived the French word 'jour' which means day. Therefore, journal means a daily record. It is called a book of original entry because every business transaction is first recorded in this book. In case of small businesses, journal is the only book of original entry. But in case if big business, where the number if transactions are large, it is practically impossible to record transaction through journal. To overcome this shortcoming, subsidiary books (special journals) are prepared for specific transaction of similar nature. Entries in the journal are recorded in chronological order i.e. as and when the business transaction occur. It will be wrong to record transaction of 21st June and of 8th June later.


Definitions

Eric. L. Kohler - "The journal is a book of original entry in which are recorded transaction not provided for in specialized journals".



Features of Journal

There are the below, features of Journal :-

  1. It is a book of original entry because transaction are recorded at first stage in this book.
  2. It is also known as day book or diary because transaction are recorded in it on day to day basis as and when they take place.
  3. The journal is only a subsidiary book, subordinate to the ledger which is the principal book of accounts.
  4. It keeps a chronological record of all transactions i.e. arranged according to the order of occurrence.
  5. The journal gives a complete picture of each business transaction and thus, maintains the identity of the transaction.
  6. Amount of transactions is recorded on the both debit and credit columns side by side. It helps in maintaining arithmetical accuracy of the books of accounts.
  7. The journal reflects the relation that exists between two aspects (debit and credit) involved in a transaction.
  8. Every entry in the journal is  followed with narration which describe briefly the true nature and context of the transaction.



Need for Journal 

The need for Journal is described in the following ways:-

  1. Convenient recording of the transaction.
  2. Maintaining and preserving the identity of the transaction.
  3. Ascertaining the true nature of transactions with the help of narrations ; and
  4. Maintaining permanent record of information.


Functions of journal

Journal performes the following functions:-

  1. To maintain the identity of each transaction as a permanent source of information.
  2. To analyse each transaction into debit and credit, so as to enable their posting in the Ledger. and
  3. To arrange transactions chronologically i.e., in order of date.



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