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Advantages of Journal

Although it is a not necessary to maintain a journal and the transactions can be recorded directly in the ledger accounts, a journal still is used for the following reasons:

  • As transactions in journal are entered as and when they take place, the possibility of omission of a transaction in the books of accounts is minimized.
  • As transactions in journal are recorded in chronological order, it is very easy to locate a particular transaction when required.
  • By analysing each transaction into debit and credit aspects, the journal facilitates the posting into ledger.
  • Each entry in the journal carries narration which gives a brief explanation of the transaction, hence posting in the ledger can be made without explanation.
  • Journal facilitates cross checking of ledger accounts in case a trial balance does not agree.
  • Since entire transaction is recorded at one place in the journal, the identity of each transaction is maintained on a permanent basis.
  • Once the transaction is recorded in journal, posting in the ledger can be made as and when convenient.

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