Books of Prime Entry

Journal – Functions and Advantages

In journal day book we record transactions in their chronological order. The process of recording transaction in a journal is known as ‘Journalisation’. The entry recorded in this book is a ‘journal entry’. Journal is the book of primary entry in which we record all transactions before posting them into the ledger. We need to keep a journal in a columnar form. There are some function and advantages of journal day book. Now we are going to discuss the Journal – Functions and Advantages.

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Functions and Advantages of Journal

Functions of Journal

(i) Analytical Function: While recording a transaction in the journal each transaction is analyzed into the debit aspect and the credit aspect. This helps to find out how each transaction will financially affect the enterprise.

(ii) Recording Function: Accountancy is a business language which helps to keeps the record of the transactions based on the principles. Each such recording entry is supported by a brief narration, which explains, every transaction in simple language. Narration means to narrate – i.e. to explain. It starts with a word – Being …

(iii) Historical Function: Journal book contains a chronological record of the transactions for future references.

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Learn more about Journal Entry here in detail.

Advantages of the Journal

The following are the advantages of a journal:

(i) Chronological Record: Journal book records transactions as and when it happens. Therefore it is possible to get day-to-day information.

(ii) Minimizing the possibility of errors: The nature of the transaction and its effect on the financial position of the business is ascertained by recording and analyzing into debit and credit aspect.

(iii) Narration: It means the explanation of every recorded transaction.

(iv) Helps to finalize the accounts: It is the basis of ledger posting and the ultimate Trial Balance.

advantages of Journal


Some other advantages of Journal

  1. Journal records all business transactions in one place on the time and date basis.
  2. All transactions which are recorded, are supported with a receipt or bill, so we can check the authenticity of each journal entries with their bills.
  3. There is a minimum chance to avoid any particular transaction because in a journal we record every transaction on a date basis.
  4. Accountant writes each journal entry’s narration below that journal entry, so another auditor can know what is the reason of that journal entry.
  5. In a journal, we record each transaction after deep analysis of two accounts on the basis of double entry system, so there is a minimum chance of mistake in the journal.
  6. Journal is the basis of posting transactions in ledger accounts. Without making of the journal, an accountant can not make ledger accounts.
  7. If there is a mistake in ledger accounts, we can easily rectify it with the help of journal or rectify journal entry in the journal.
  8. All opening journal entries, closing journal entries and all other transactions which we cannot record in any other subsidiary books, we record them in the journal proper.
  9. We also need Journal in every accounting software. This accounting software can make an auto system of posting journal entries to the ledger by their automatic processing, but the accountant must feed journal entries in the journal and other specific vouchers of the journal.
  10. There is one column of ledger folio. It is very helpful for checking reference of each account’s posting with its original journal entry.

Solved Example on Advantages of Journal

What are the books of prime entry other than a journal?

Ans: Books of prime entry is a book or record in which we record certain types of transactions before they become a part of the double-entry book-keeping system. The common books of prime entry are:

  1. Purchase day book
  2. Sales day book
  3. Purchase return day book
  4. Sales return day book
  5. Cash book
  6. Petty cash book
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2 responses to “Journal – Functions and Advantages”

  1. Zarrar Hasan says:

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