Books of Prime Entry

Sub Division of Journal

What is Journal?

A journal is a book of prime entry. Any transaction is first recorded in a journal and then posted from there to the ledger accounts. We record transactions here in the chronological order. An organization has an option to either maintain a single Journal Book or to maintain separate Journals for each kind of transactions. Let us study in detail what is journal?

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Sub Division of Journal

We can divide the journal into the following two types:

  1. General Journal
  2. Special Journal

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General Journal

In this book, we record transactions in the chronological order. We record those transactions in this book which do not occur frequently and also which we cannot record in the special journals.

The recording of transactions is known as journalizing. Also, the record of the transaction is known as a journal entry.

Usually, we pass the opening entries, closing entries, rectification entries, adjustment entries and entries relating to incomes and expenses which are due.

Learn more about Sub Division of the Ledger here in detail.

Special Journal

It is popularly known as the subsidiary books. In these books also, we record transactions in the chronological order.

However, we record transactions in these books which occur frequently and on a regular basis. All the transactions of similar type are recorded in a separate book.

There are eight subsidiary books that an organization maintains, viz., Cash Book, Purchases Book, Sales Book, Purchase Return or Return Outwards Book, Sales Return or Return Inwards Book, Bills Receivable Book, Bills Payable Book and Journal proper. A Cash Book is a subsidiary book as well as a ledger.

Importance of Sub-Division of Journal

In a case where the number of transactions is large, it is difficult to record all the transaction by way of a journal entry. This is so due to the following limitations of the Journal:

  1. When we record transactions by way of a journal entry, we need to write the name of the account involved as many times as the transaction occurs. Also, each time we need to post the entry on the debit and credit side of the accounts. Thus, it is a cumbersome method.
  2. Also, every time a narration has to be written which unnecessary increases labor.
  3. This system is unable to provide information on a prompt basis.
  4. As only one person handles the journal, it cannot facilitate the installation of a system of internal check also.
  5. The journal owing to the voluminous transactions becomes huge.

In order to overcome these limitations, organizations prefer using subsidiary books.

what is journal


Compound Journal

Simple journal entry refers to a situation where for a single transaction we need to debit one account and credit one account only.

However, Compound Journal entry refers to a situation where for a single transaction we need to debit more than one account or credit more than one account.

Solved Example For You

Pass the compound journal entry in the following cases:

  1. Commenced business with Building ₹50000, Stock ₹10000, Cash ₹40000.
  2. Purchased goods for cash ₹10000 and from Anil ₹5000.
  3. Paid Anil ₹4800 in full settlement.


In the books of  XYZ

Journal entries

Date Particulars Amount (Dr.) Amount (Cr.)
1. Building A/c Dr. 50000
Stock A/c Dr. 10000
Cash A/c Dr. 40000
To Capital A/c 100000
(Being commenced business with a building, stock, and cash as capital)
2. Purchases A/c Dr. 15000
To Cash A/c 10000
To Anil’s A/c 5000
(Being purchase of goods in cash and on credit)
3. Anil’s A/c Dr. 5000
To Cash A/c 4800
To Discount received A/c 200
(Being payment to Anil in full settlement)


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2 responses to “Journal – Functions and Advantages”

  1. Zarrar Hasan says:

    Sir I’m pursuing b. Com last year student wt i do sir any diploma course any job please tell

  2. degefu says:

    for the past several years johnson has operated apartime consulting business from his home .As of april 1,2006 johnson decided

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