Difference between Journal and Ledger

Difference between Journal and Ledger

Difference between Journal and Ledger: –

Difference between Journal and Ledger is that the journal is the first step of bookkeeping and 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. Accounting cycle starts from the journal and followed by ledger, trial balance and final accounts. 

 

Meaning of Journal:-

Journal in Accounting is the process of analyzing and recording of 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.

The format of journal account - Difference between Journal and Ledger
The format of the journal account

 

Meaning of Ledger:-

It is a book of account in which we kept all the transactions of a particular account separately. With the help of ledger, we get whole information about a particular account at 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.

Ledger Account Format  - Difference between Journal and Ledger
Ledger Account Format

Chart of Difference between Journal and Ledger: –

Basis of Difference

Journal

Ledger

Meaning

Journal in Accounting is the process of analyzing and recording of business transactions in chronological (day to day) order. Ledger is a book of account 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 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 of a ledger account. 

Financial Statement 

We can not prepare financial statement directly from the journal We can prepare financial statement 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 ledger, we can get 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.  Ledger contains a journal folio column. 

Total Columns 

Journal contains a total of five columns  Ledger contains a total of eight columns.

Sides 

It does not have any side. It has two sides i.e. debit and credit side.

If you want to Download the chart please download the following image and PDF file: –

Chart of Difference between Journal and Ledger 182x300 - Difference between Journal and Ledger
Chart of Difference between Journal and Ledger

 

 

application pdf - Difference between Journal and Ledger
Chart of Difference between Journal and Ledger

 

 

 

 

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.

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