7 Difference Between journal and Ledger

Journal and Ledger are two methods to record the monetary transaction. Both records are very important and effective. Journal is like a book in which all monetary transactions are recorded as per when they are done. Ledger is a standard form of recording the monetary transaction as per the concerned account. In the ledger entries is picked us from the journal. Ledger is a principal book of all monetary transactions.

Journal is the first step to record the data of the monetary transaction while ledger is one step before from the balance sheet. So, it’s very important to understand the concept of journal and Ledger. In this article we will discuss in detail about the journal and Ledger. We will also discuss the difference between the journal and ledger. And also discuss the important terms which are related to the journal and Ledger.

Journal vs Ledger

Sr. No.	Journal	Ledger
1	Monetary transactions are recorded for the first time.	Entries posted from the journal to the separate account
2	Subsidiary method of record	Principal record book.
3	Contains original or first-time entry	Known as a second entry book.
4	Chronological order is followed	Analytical order is followed
5	Entries are done according to when they are done or arise.	Entries done according to accounts.
6	Short note of the transaction is attached.	No note is available in ledger.
7	No need to balance the journal account	Need to balance the ledger account.

Journal

It is also known as the book of the first recording of the monetary transaction. In journal all the entries are recorded when the done or arises. In this when a entry done details of the transaction also mentioned in the column as a short note for the future identification. Single transaction two account effects which are credit and debit accounts.

In the journal transactions are recorded as chronological order. The recording process in journal is terms as the journalizing. Journal entry contains five columns which are Date, particulars, Ledger Folio, Debit and credit.

Journal have two types

1. Single Entry
2. Compound Entry

What is Ledger

Ledger is a book in which monetary transactions are recorded as per the accounts. In this data and entries are picked up from the journal. The entries which are available in the journal are analyzed and classified as per the accounts and then entered in the ledger. In the ledger all the accounts contain the description like name of client and past entries.

When the entries are recorded in the ledger separate account is opened for a particular person. The format of the ledger is T shaped in which it has two columns. one column contains the debit and the other one contains credits. To is used when the transaction is recorded in debit and by word is used when entry is done on the credit side.

Ledger account is balanced at the end of the financial year. Balance of both the columns are calculated and then finding the difference between both the columns. If the balance on the debit side is more than the credit this is known as debit balance. If the balance on the credit side is more the debit then it is known as credit balance.

Main differencee between journal and Ledger statements.

1. Journal is a book in which monetary transactions are recorded for the first time. When the entries posted from the journal to the separate account are known as ledger.
2. Journal is a subsidiary method of record. The ledger is known as the principal record book.
3. Journal contains original or first-time entry. While ledger is known as a second entry book.
4. Chronological order is followed in the journal. Analytical order is followed by the ledger.
5. In journal entries are done according to when they are done or arise. While in ledger entries done according to accounts.
6. In the journal a short note of the transaction is attached. While no note is available in ledger.
7. No need to balance the journal account. Ledger accounts are balanced.

Conclusion

Journal and ledger are very important for the recording of the monetary transactions. Journal is used to record the entries at the time of arise. Ledger picked up data from the journal and arranged it according to the accounts. After that this data is used for the trial balance and balance sheet. These accounts are base of the financial accounts.

This is all about the journal and ledger. Hope this article will be helpful for you. If you have any doubt please feel free to comment on us. For more interesting topics like this please go through our website.