Journal Entry Format

Journal is a book in which all the transactions of a business are recorded for the first time. We have already discussed in the previous unit that every transaction affects two accounts, one is debited and the other one is credited. ‘Debit’ (Dr.) and ‘Credit’ (Cr,) are the two terms or signs used to denote the financial effect of any transaction. The word ‘journal’ has been derived from the French word ‘JOUR’ meaning daily records. Journal Book is maintained to have prime records for small firms. After preparing the journal book, the transactions are then posted to Ledger.

Format of Journal:

1. Simple Journal Entry

2. Compound Journal Entry

Or

Or

We will discuss the items of the format one by one:

1. Date: In this column, the date on which the transaction was recorded is mentioned. The year is written at the top, following the month and then the day. 

2. Particulars: Every transaction affects at least two accounts. One is debited and the other one is credited. The item that is debited is mentioned first and the word ‘Dr.’ is also written after that. In the next line, the item which is credited is written, a few spaces away from the margin, starting with ‘To’.

Narration- After every journal entry, a brief explanation of the transaction with necessary details is given.

3. Ledger Folio or LF: Ledger Folio shows the number of the page on which the ledger account of that particular item is made.

4. Amount (Dr.): The amount that is debited is mentioned here.

5. Amount (Cr.): The amount that is credited is mentioned here.