Passing of Journal entries in the books of Vendor

Journal is a book of original entry. All day-to-day transactions of business are recorded first in it in a chronological order with the help of vouchers like cash receipts, cash memos, invoices, etc. Journal is also called a ‘Day Book’. The process of recording business transactions in the journal is called ‘Journalising’ and the entries passed in this book are called ‘Journal Entries’.

The ruling of Journal is given below:

Journal: 

The Journal consists of five columns. The first column is used for recording date of the transaction with year. In the second column i.e., ‘Particulars’, the journal entry is made by mentioning the two accounts affected by the transaction. The accounting entry is passed following the ‘Accounting Equation’ or ‘Dual Aspect Concept’.

The two accounts affected by the transaction are debited and credited by the same amount. The third column LP, i.e. Ledger Polio is used for writing the page number of the ledger on which the particular account appears. The fourth and fifth columns of journal are meant for writing respectively ‘Debit’ and ‘Credit’ amounts of the transaction.

The Journal consists of five columns. The first column is used for recording date of the transaction with year. In the second column i.e., ‘Particulars’, the journal entry is made by mentioning the two accounts affected by the transaction. The accounting entry is passed following the ‘Accounting Equation’ or ‘Dual Aspect Concept’.

The two accounts affected by the transaction are debited and credited by the same amount. The third column LP, i.e., Ledger Polio is used for writing the page number of the ledger on which the particular account appears. The fourth and fifth columns of journal are meant for writing respectively ‘Debit’ and ‘Credit’ amounts of the transaction.

Account

In simple words, an account is a summarised record of all transactions relating to a particular person, a thing or an item of income or expense. You will know more about the ruling of an account under the next context titled Ledger 32.6.

An account resembles the shape of the English alphabet ‘T’ as follows:

Classification or Types of Accounts:

All business transactions relate to three accounts, namely, (i) Personal Accounts, (ii) Real Accounts, and (iii) Nominal Accounts. When real and nominal accounts are taken together, these are called ‘Impersonal Accounts.”

(i) Personal Accounts:

Accounts relating to persons and organisations representing to persons are called ‘Personal Accounts.’ Examples are Chinmoy’s Account, Mazumdar’s Account, The State Bank of India Account, Tanmoy & Sons’ Account, Carnal Paper Mills’ Account, Salaries Outstanding Account, etc.

(ii) Real Accounts:

Accounts which are related to properties or assets are called ‘Real Accounts.’ They are called Real Accounts because they represent things of value owned by the business. Cash Account, Furniture Account, Building Account, etc. are the popular examples of Real Accounts.

(iii) Nominal Accounts:

Accounts relating to expenses, losses, incomes, gains, profits are called ‘Nominal Accounts.’ Examples of nominal accounts are Wages Account, Salaries Account, Commission Received Account, Interest Received Account, etc.

Rules for Debit and Credit:

The rules applicable for debiting and crediting the three types of accounts are summarised

Rules for Debit and Credit: