The difference between Journal and Ledger is that the journal is the first step of bookkeeping and the ledger is followed by the journal. Because the bookkeeping involved the predefined/Standard process of recording all the business transactions in the books of account. This process is known as the accounting cycle. The accounting cycle starts from the journal and followed by the ledger, trial balance, and final accounts.
Meaning of Journal:-
Journal in Accounting is the process of analyzing and recording business transactions in chronological (day-to-day) order. This book is also called the Book of Prime or Original Entry book. The journal entries are the foundation of the accounting system and it is also a first step of the accounting cycle.
Meaning of Ledger:-
It is a book of accounts in which we kept all the transactions of a particular account separately. With the help of a ledger, we get whole the information about a particular account in a single place. but in the journal, all the transactions are recording date wise but if we want the total balance of a particular account then it is very difficult to get it.
Chart of Difference between Journal and Ledger: –
| Basis of Difference | Journal | Ledger |
| Meaning | Journal in Accounting is the process of analyzing and recording business transactions in chronological (day-to-day) order. | Ledger is a book of accounts in which we kept all the transactions of a particular account separately. |
| Type | it is the subsidiary book | It is the final book of account. |
| Order of Recording | In the journal, all transactions are recorded in chronological (day-to-day) order. | In the Ledger, the transactions related to a single account(Cash, Bank, etc.) are recorded in chronological (day to day) order in a particular ledger account. |
| Name of Process | Journalizing | Posting from journal to ledger. |
| Format | In the format of the journal, debit and credit are two different columns. | In the format of the Ledger, debit and credit are two different sides of an account. |
| Nature of Account | All transactions are recorded in the same book called a journal. | All transactions are posted in the particular ledger account according to the nature of an account. |
| Balance | It is very difficult to know the balance of a particular account. | The ledger is prepared to know the balance of a particular account. |
| Narrations | Journal contains a narration for every transaction | Ledger may or may not contain a narration of every transaction. |
| Also known as | The book of prime or original entry book | The book of second entry and statement of account. |
| Process of Balancing | It does not include the process of balancing. | It includes the process of balancing or closing a ledger account. |
| Financial Statement | We can not prepare financial statement directly from the journal | We can prepare financial statements directly from the ledger but not so easy for larger businesses. |
| Revenue | The Journal not providing any information about the total revenue earned during the year. | In the ledger, we can get to know about the revenue earned during the year from the total Sales accounts. |
| Closing Balances of the Assets | It is very difficult to know the closing balance of the assets at the end of a particular accounting period. | It is very easy to know the closing balance of the assets at the end of a particular accounting period. |
| Folio | Journal contains a ledger folio column. | The ledger contains a journal folio column. |
| Total Columns | Journal contains a total of five columns | The ledger contains a total of eight columns. |
| Sides | It does not have any side. | It has two sides i.e. debit and credit side. |
Download the chart: –
If you want to download the chart please download the following image and PDF file:-
Conclusion: –
Journal is the original entry book and we record all day-to-day transactions in the journal first then after we post these all transactions in the related ledger accounts. Both are the step of the accounting cycle.
Thanks for reading the topic
please comment with your feedback whatever you want. If you have any questions please ask us by commenting.
Check out T.S. Grewal’s +1 Book 2019 @ Official Website of Sultan Chand Publication
T.S. Grewal’s Double Entry Book Keeping