Journal Writing

Journal entries are also known as the “book of original entry’’ because when any financial transaction occurs in the organization at first it is recorded in the journal that’s why it is called the first step in the accounting process. The process of recording transactions into Journal is known as the Journalising. It is the book of accounts where daily record of all transactions are maintained. Each entry contains equal debit and credit. Business events occur by the transaction, the journal entries are recorded in the general journal to know how the events are effecting the two accounts i.e. Debit or Credit. Entries in the journal are recorded in chronological order.

journal writing in accounting economy finance

Example of Journal:- Rohan purchased goods for cash 20,000.

So, here purchased account will be recorded as debit while cash account will be recorded as credit.

Rules for Journalising

RULE NO.1 – Real or Assets Accounts

  • Debit what comes in
  • Credit what goes out

RULE NO.2 – Personal Accounts

  • Debit the receiver
  • Credit the giver

RULE NO.3 – Nominal – Expenses Accounts


Journal includes five columns in its performa & these five columns are:-

  1. Date column
  2. Particulars column
  3. Ledger folio column
  4. Debit Amount column
  5. Credit Amount column.


Date Particulars L.F. Dr. Amount Cr. Amount


Debited Account

– To Credited Account



Explanation of the five columns of the journal:

  1. DATE: In this at the top of the column first we have to write the year, then below the year date is written on which a transaction takes place. Year is written only at the starting of the page.
  2. PARTICULARS: This column indicates the double entry. In this column, the name of the account which was debited and the account which has credited is written. The name of the credited account is written in the next line & it is prefixed by the word ‘ To’ and then the name of the credited account is written. After writing the names of two accounts which are changed by the business events narration is written which shows that for what business event these two accounts are effected or you can say that it gives us detail of the event.
  3. LEDGER FOLIO (L.F.): It means page. This column includes the page number of the ledger where the account has been opened, is entered.
  4. Dr. AMOUNT: In this column, the amount to be debited is written and this column is denoted by the word Dr. (for debit).
  5. Cr. AMOUNT: In this column, the amount to be credited is written and this column is denoted by the word Cr. (for credit).
  6. NARRATION: There is no column for the details in the journal , which shows the nature of the transaction. It is important to know the origin of the entry. So, along with each journal entry, a brief explanation is written before the line is drawn after the completion of each journal entry.

In every journal , there are at least two accounts that are affected by the business transactions i.e. one is debit and the second one is credit account. As accounting equations say that the total of the debit and credit must be equal in amount.

The total of the debit and credit is done at the end of the page and it is written or denoted by the word “Total c/f”. It is written on the next page at the opening of the journal as “Total b/f”. Abbreviations ‘c/f’ stands for carried forward while ‘b/f’ stands for brought forward. Similarly, the other two abbreviated terms used are ‘c/o’ carried over while ‘b/o’ stands for brought over.

Steps: How to make/write journal entries

  • Open the Ms.Excel.
  • Give headings in columns A, B, C, D, E – Date, Particulars, Ledger Folio, Dr. Amount, Cr. Amount respectively.
  • You can adjust the font value, font style to highlight these headings.
  • Highlight the border of the complete row of headings from A1 to E1 by dragging the mouse from A1 to E1 and click on the right button of the mouse.
  • After clicking on the right button of the mouse, few options will appear on your screen, select the option Format cell.
  • Then, a box with different options at the top will open, click on the borders, here you have to write the width of the border that you wants to be, then select the sides in the user-defined box that you wants to highlight- left, right, top, bottom.
  • In the column of the date, the year is written at the top of every page. The year is written only at the starting of the page.
  • Then, the name of the month is written in the next column of the page.
  • After this, Date is written on which a transaction takes place.
  • Write the name of the accounts which has been Debited and Credited. It includes:- 1. Name of the debited Account in the column of the particulars; 2. Name of the Credited Account prefix with the word “To” is written in the next column & 3. In the next column of the particulars write the narration (along with each journal entry a brief explanation is written before the line is drawn after the completion of each journal entry.
  • After writing the narration draw a line in the particulars column which shows the completion of the first journal entry. A line is always drawn after the completion of each journal entry.
  • In the folio column writes the page number of the ledger where this entry has been recorded in the ledger.
  • Write how much amount has been debited under the heading Dr. Amount.
  • Write how much amount has been credited under the heading Cr. Amount.
  • After that, your first journal entry has completed.
  • Similarly, you can maintain the record of all the financial transactions.
  • After recording all the transactions the next step is to calculate the debit amount and credit amount.
  • Drag the mouse from the top to the bottom where you have to write the total and then, click on the f(x), that lies above the column headings.
  • Here you have the number of options- Sum, Divide, etc. Select the appropriate option. Click on the sum to get the total of the Debit and Credit amount.
  • Simply, you can write the formula of the sum: FORMULA:= Sum(number1, number2,…..).Here, the number stands for the column name:- A, B, C, or D. While 1, 2, is the row number where the amount has written. For example:- Suppose the debit amount is written in the column “D” and the debit amount for the first and second journal entry is written in the row no. 3, 6 respectively.
  • So, the formula will be the: = Sum(D3, D6)
  • After writing the formula press enter, you will get the total of the debt amount.
  • Similarly, you can calculate the total of the Credit amount.

Examples of Journal entry

  1.  Roshan starts his business in 2009.
  • Jan. 1 He has started his business by investing cash Rs.1,00,000
  • Jan. 4 Purchased furniture for cash Rs.15,000
  • Jan. 6 Purchased goods for cash Rs. 20,000
  • Jan. 8 Sale goods for cash Rs.18,000
  • Jan. 10 Paid salary to Harish Rs. 6,000
  • Jan. 12 Paid rent for Rs.1,000
  • Jan. 16 Deposited cash into bank Rs. 20,000

                                                                          Journal For Roshan

Date Particulars L.F. Dr. Amount
Cr. Amount
2009   Rs. Rs.
1st Jan. Cash Account………………………..Dr. 100000
To Capital Account 100000
(Being started business by investing cash)
4th Furniture Account……………………Dr. 15000
To Cash Account 15000
(Being purchase of furniture of cash)
6th Purchases Account…………………Dr. 20000
To Cash Account 20000
(Being goods purchased for cash)
8ht Cash Account………………………..Dr. 18000
To Sales Account 18000
(Being sold goods for cash)
10th Salary Account……………………….Dr. 6000
To Cash Account 6000
(Being payment of salary)
12th Rent Account…………………………Dr. 1000
To Cash Account 1000
(Being payment of rent)
16th Bank Account………………………..Dr. 20000
To Cash Account 20000
(Being cash deposited into bank)
Total c/f 180000 180000

Three accounts are also possible in a single entry. This happens when there is an account of a discount. Discount means discount allowed by the seller or by the supplier to the customers in the full settlement of the cash. Trade discount will not be recorded in the journal entries. Let’s have an example for this problem:-

Example 2: Sandeep Singh started business on 1st April, 2011 by investing Rs. 1,50,000.

  • April 2. Sold goods worth Rs. 5,000 to Sudhir and allowed 10% trade discount.
  • April 6. Received Rs .4,400 from Sudhir in full settlement of his account.
  • April 9. Sold goods to Deepak Rs. 6,000.
  • April 13. Received Rs. 5,850 from Deepak in full settlement.


                                                                       Journal for Sandeep Singh

Date Particulars L.F. Dr. Cr.
2011 Rs. Rs.
1st April Cash a/c…………………………….Dr. 150000
To Capital a/c 150000
(Being started business by investing cash)
 2nd Sudhir a/c…………………………..Dr. 4500
To sales a/c 4500
(Being goods worth Rs. 5,000 were sold at 10% trade discount was allowed)
6th Cash a/c………………………………Dr. 4400
Discount a/c………………………..Dr. 100
To Sudhir 4500
(Being cash received less discount)
9th Deepak……………………………….Dr. 6000
To sales a/c 6000
(Being sold goods for cash)
13th Cash a/c……………………………..Dr. 5850
Discount a/c……………………….Dr. 150
To Deepak 6000
(Being cash received less discount)
Total c/f 171000 171000

Terms used in Journal entries

Payroll Journal Entry: It is a salary-sheet and is used to pay payment to employees.

Journal entry Nominal account: It is the account which includes expenses, loses, income, gains and profits, etc.

Examples of Nominal account: Salary account, purchase account, etc.

P2P Cycle/Purchase to Pay/Procure to pay: It is a process that includes obtaining and managing the raw material needed by a department or factory.

Journal Vs General Ledger

Both of them follows the concept of duality (means double-entry accounting system). The main difference that lies between them is that the Journal is the first point or step of entry while the ledger is the second point of entry. In the Journal, the transactions are recorded for the first or when they occur. After entering the transactions in the Journal, then they are posted into the ledger (means in individual accounts).

Importance/Advantages of Journal In Business or Accounting

  • Helps in examining how financial transactions affect a business.
  • Each entry is recorded date-wise.
  • Errors in the past can be corrected with the help of journal entries.
  • It includes narration which tells us the reason for entry & it makes the checking of entry easy.
  • Can be used for auditing whenever required.



Post Your Opinion

Your email address will not be published. Required fields are marked *