Relationship between Journal and Ledger in Accounting Process

According to principles of double entry accounting, business transactions are first recorded in the journal and thereafter these are transferred to ledger under respective heads of accounts.

But transactions can directly be posted to the ledger without making their entries in the journal and total results of accounts can be determined at the end of accounting period.

However, It is never wise to maintain ledger by ignoring the journal, because:

Relationship between Journal and Ledger in Accounting Process

  1. Detail particulars of transactions are available in the journal but not in the ledger.
  2. Numerous transactions take place every day in a big business organization. As a result, it becomes almost impossible to post these transactions in ledger same day directly. Therefore transactions are recorded primarily in the journal and thereafter it becomes convenient to transfer them in the ledger.
  3. There remains a possibility of errors in transferring the transactions directly to the ledger.
  4. Journal is the primary book of account. So, in recording transactions in the journal, if any mistake or error is detected, it can be rectified at the time of transferring them to the ledger.
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