Characteristics of Journal

Characteristics of Journal

In this article we would explain some important characteristics of journal. Financial transactions are recorded in journal in first place, therefore journal is known as book of original or book of primary entry.

Important Characteristics of Journal

Some important characteristics of journal have been explained in this article are book of original entry, recording with help debit & credit rules, reflection of complete transaction, chronological order of recording etc. These characteristics have been briefly explained below

1.   Book of Primary Entry:

Recording of financial transaction in the journal is the first step of processing of financial information. The recording of transaction in journal is also called journalizing the transaction.

2.   Rules of Debit & Credit:

Transactions in the journal are recorded under the standard rules of debit & credit. Asset and expenses are debited for increase and credit for decrease, while income and liabilities are credited for increase and debited for decrease. These rules have been explained in more details in my other article.

3.   Reflect Complete Transaction:

Journal reflects complete transaction in the form of debit and credit. Thus it is much easier to understand transaction in journal. The narration in journal is also provides useful information about transaction. Narration is a brief description of the transaction added at the end of each transaction. 

4.   Chronological Recording:

Transactions in journal are recorded in chronological order (Date wise recording). Thus tracking of information is much easier in journal, especially tracking of omitted transactions.

5.   General Journal & Special Journal:

In small scale organization only one journal is maintained i.e. General journal, where in large scale organization in addition to general journal many other special journals are maintained like sales journal, purchase journals. These special journal are use to control high volume of transaction. 

6.   Format of Journal

There are two standard formats used for recording the journal entry. The only difference between these two formats is the additional column of voucher number. The second format is mostly used by the accountants.

Date	Particular	Folio	Dr.	Cr.
21.08.2016	Machinery		10,000
	Khan			10,000

Date	Voucher #	Particular	Folio	Dr.	Cr.
21.08.2016		Machinery		40,000
		Khan			40,000

7.   List of Characteristics of Journal

Some important characteristics of journal are listed below

a.    Transactions are recorded in journal.

b.    Journal uses rules of debit & credit for recording.

c.    Special journal are used for high volume of transactions like credit sales.

d.    Journal reflects the complete transaction.