Book of Original Entry - Explained - The Business Professor

It is the journal in which invoices, vouchers, cash transactions and others are first recorded before they are transferred to ledger accounts. Home Accounting,Taxation,andReporting Managerial&FinancialAccounting&Reporting BookofOriginalEntry-Explained WhatistheBookofOriginalEntry? WrittenbyJasonGordon UpdatedatSeptember15th,2021 ContactUs Ifyoustillhavequestionsorprefertogethelpdirectlyfromanagent,pleasesubmitarequest.We’llgetbacktoyouassoonaspossible. Pleasefilloutthecontactformbelowandwewillreplyassoonaspossible. 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Backto:ACCOUNTING,TAX,&REPORTING HowistheBookofOriginalEntryUsed?Bookoforiginalentryisanaccountingjournalthatcarriesdetailsandevidenceofbusinesstransactionsbeforetheyarepostedortransferredintoproperledger. Withoutthebookoforiginalentrybeingfilledwithevidenceofbusinesstransactions,thewritingofaledgercannotbeinitiated. AsderivedfromaFrenchword,journalmeansdailyfromitsrootwordJourwhichmeansday. Dailybusinesstransactionswhereinvoice,cash,vouchersandotherevidencesareusedmustberecordedinthebookoforiginalentry. Transactionsinvolvingcreditsanddebitsarefirstrecordedinthejournalwiththeirdescriptionsoutlined. Essentially,thebookoforiginalentryreflecttheaccountsconnectedwithabusinesstransaction. Vouchers,invoices,cashandotheraccountsrecordedinabook,list,journal,diaryorleafletareentries. Anentryisanactofadequatelyrecordingtheevidenceanddetailsofabusinesstransactionintheappropriatebook,itmightbeadiaryorajournal. Therearetwotypesofentry,theyare;JournalEntryThisreferstoevidenceofbusinesstransactionsthatarerecordedinajournal.LedgerEntryBusinesstransactionsthatarepostedortransferredfromajournaltoaledgerareregardedasledgerentries. Therearedifferentaccountsinaledger,eachbusinesstransactionispostedintotheconcernedaccountsintheledger.InformationintheBookofOriginalEntryNarration:Everyentrycarriesadescription,abriefexplanation,thisiswhatisknownasnarration.Ajournalentryisregardedincompletewithoutnarrations.Narrationsareimportantforcategorizingtransactionsintoappropriateaccounts.Whatabusinesstransactionentailsandthenatureofthetransactionareascertainedthroughnarration.Furthermore,mistakesthatoccurwhilerecordingtheevidenceofabusinesstransactionaredetectedandcorrectedthroughthenarration.Characteristics:Inaccounting,therearecertainfeaturesofajournal.Ajournalissometimescalledasubsidiarybookorassistantledger.Ajournalisthefirstbookinwhichtransactionsarerecordedbeforetheygettransferredintoaccountsintheledger.Ajournalcontainsdailydetailsofbusinesstransactions,thismeansthatalltransactionsforadayarerecordedinthejournal.Recordingoftransactionsisdoneinchronologicalorderandnarrationforeachtransactioniswrittenbeneathit.Eachtransactionisalsorecordedinajournalreflectingtheconcernedaccount,whethercreditordebit.Eachamountiswrittenintheappropriatecolumndesignedforit,debitsdointodebitcolumnandcreditsintocreditcolumn.AdvantagesofJournal:Theadvantagesofajournalare; Transactionsarerecordeddailyandatthemomenttheytakeplace,thisreducesthechanceforomissionofrecordortransaction. Transactionsareoutlinedinachronologicalordermakingiteasyforthemtobeeasilyascertainedwhenbeingtransferredintotheledger. Eachiteminajournalhasanarrationunderit,makingtheeasydetectionofmistakesintherecordpossible. Allthedetailsofatransactionarecontainedinajournal. Debitandcreditaccountsareincludedinajournal,thisreducethepossibilityofmistakewhenpostingthemintoaledger. FormatofJournal:Recordingdetailsofbusinesstransactionsinajournalrequiresfollowingtheadequateprocess.Everyjournalhasaformatwhichmustbefollowedwheninputtingdailyrecords.Theformatofajournalis;DateParticularsL.FAmountAmountAccounttobedebited.............................Dr.XXXAccounttobecreditedXXX(Narration)RulesforJournalizing:Theformatofajournalbasicallycontainscolumnsreflectinghowrecordsinajournalshouldlike.Therulesofjournalizingcanbeallunderstoodgiventheexplanationofthecolumnsinajournal.Thecolumnsinajournalaretheretoguidewhoeverisrecordingthedailytransactionsonhowtogobyitwithoutmakinganyerrorsoromission.Theexplanationofdifferentcolumnsisoutlinedbelow.Date:Asexpected,thedatecolumncarriesthatdatewhichthebusinesstransactionoccurs.Differentdateformatsarepermissible.Forexample,thedatecouldbewrittenas30May2009,30/05/2009or05.30.2009.ParticularsorDetailsColumn:Inajournal,therearetwocolumnsfordifferentaccounts,thedebitaccountandthecreditaccount.Theyoftenoccupytwoconsecutivecolumns,thefirstbeingthedebitaccountandthelatterthecreditaccount.Thepurposeofthesecolumnsistodistinguishbetweenaccountsthatarecreditedandaccountsthataredebited.Thetwocolumnsalsohavetwodistinctsymbols;"Dr"isfortheaccountthatisdebitedwhile"Cr"symbolizesaccountsthatarecredited. AcademicResearchonBookofOriginalEntry Somevariationsinaccounting practiceinEngland,France,GermanyandtheUnitedStates,Hatfield,H.R.(1966). JournalofAccountingResearch,169-182. Accounting forrationality:Double-entry bookkeepingandtherhetoricofeconomicrationality,Carruthers,B.G.,&Espeland,W.N.(1991). Americanjournalofsociology, 97(1),31-69.  EarlyViewontheOriginsandDevelopmentofBook-keepingandAccounting,Yamey,B.S.(1980). AccountingandBusinessResearch, 10(sup1),81-92. Earlydevelopmentsinamericanauditing,Moyer,C.A.(1951). TheAccountingReview, 26(1),3-8. Paciolo-Patriarchofaccounting,Langer,C.(1958). TheAccountingReview, 33(3),482-484. Theevolutionofthejournalentry,Littleton,A.C.(1928). AccountingReview,383-396. FinancialAccounting,Shah,P.(2013). OUPCatalogue.  Doubleentry versuschargeanddischargeaccounting ineighteenth-centuryFrance,Lemarchand,Y.(1994). Accounting,Business&FinancialHistory, 4(1),119-145.  Accounting fortheestatesofdeceasedtravellers:anexampleofearlySpanishdoubleentry bookkeeping,Anes,R.D.(2002). AccountingHistory, 7(1),79-99.  Noonestandsstillinpublicaccounting,Dennis,A.(2000). JournalofAccountancy, 189(6),66. bookoforiginalentry originalentry RelatedArticles AccountingCycle-Explained ChartofAccounts-Explained Comptroller-Explained AdjustedBookValue-Explained Close Expand