Accountancy · Ch 4 — Ledger
Relationship Between Journal and Ledger
5
Relationship Between Journal and Ledger
The Journal and the Ledger are not two alternative ways of recording — they are two sequential steps of the same process, and neither can replace the other.
| Basis | Journal | Ledger |
|---|---|---|
| Order of use | First (Book of Original/Prime Entry) | Second (Book of Final Entry) |
| Basis of recording | Chronological (date-wise) | Analytical (account-wise) |
| Process | Journalising | Posting |
| Narration | Compulsory, for every entry | Not required |
| Balancing | Not done | Done, to find net position of each account |
| Purpose | To record every transaction as it happens | To show the net effect of all transactions on a particular account |