Both the chapters journal and ledger along with the accounting cycle is resent in the PPT with their formats. It makes the learning of the chapters easy for an accountancy student.

1. Journal
Ledger
Trial
Balance
Trading And Profit
& Loss a/c
Balance
Sheet
ACCOUNTING CYCLE

2. Book of original or prime entry as business
transactions are recorded at the first instance.
Transactions recorded in the order in which
they occur, i.e. in chronological order.
Basic book of accounting
JOURNAL

3. The process of entering or recording the
transaction in the journal is called
Journalising.
Record of each transaction in the journal is
called journal entry.

4. Date Particulars L.F Debit Credit
JOURNAL

5. Personal
A/c
Debit the
receiver
Credit the
giver
Real A/c
Debit what
comes in
Credit what
goes out
Nominal
A/c
Debit all
expenses
and losses
Credit all
gains and
incomes
RULES OF DEBIT AND CREDIT

6.  Journal provides a chronological i.e. date wise record of
all business transactions at one place.
 Transactions recorded as and when they take place,
chances of any transaction being unrecorded is reduced
to the minimum.
 Facilitates preparation of ledger accounts.
 Serves as evidence in the court of law.
 Transactions recorded with narration, reason for each
transaction can be ascertained.
ADVANTAGES OF JOURNAL

7.  When the number of transactions is very large, it may
practically be difficult, if not impossible, to record all the
transactions through one journal because of the following
reasons:
 (1) The system of recording all the transactions in a journal
requires the writing down the name of the account involved as
many times as the transactions occur.
 (2) Such a system does not provide the information on prompt
basis.
 (3) Such a system does not facilitate the installation of an
internal check system, since the journal can be handled only
by one person.
 If we have a serious look on the limitations, it can be
observed that most of them have been done away with,
because of the advent of computer vis a vis accounting
related softwares like tally.
LIMITATION OF JOURNAL

8. LEDGER

9. Book of secondary entry
Transactions recorded in the journal are finally
carried to the ledger.
Contains all the accounts of a business
whether real, personal or nominal.
LEDGER

10. Debit Credit
Date Particulars J.F Amount Date Particulars J.F Amount
FORMAT

11. BASIS JOURNAL LEDGER
1.Nature Of
Book
It is a book of prime entry It is book of secondary entry
2.Basis Of
Preparation
It is prepared on the basis of
source documents.
It is prepared on the basis of
journal.
3.Object It is prepared to record all
transactions in chronological
order.
It is prepared to know the net effect
of various transactions affecting a
particular account.
4.Balancing Journal is not balanced. All ledger accounts are balanced
5.Narration Narration is written for each
entry
No narration is given.
6. Name of
process
The process is called
journalizing.
The process of recording in the
ledger is called posting.
DISTINCTION BETWEEN JOURNAL AND
LEDGER

12. “Trial balance is a statement containing
the balances of all ledger accounts, as
at any given date, arranged in the form
of debit and credit columns placed side
by side and prepared with the object of
checking the arithmetical accuracy of
ledger postings.”
TRIAL BALANCE

13. It is a statement or a schedule.
It contains debit and credit balances of
various accounts.
If the trial balance does not agree, it points
out that there are some errors.
It can be prepared only after balancing all the
accounts in the ledger.
It is prepared to check the arithmetical
accuracy of books of accounts.
FEATURES OF TRIAL BALANCE

14. To provide check on arithmetical accuracy of
books of accounts
To provide a basis for the preparation of final
accounts
To provide a summary of ledger accounts
OBJECTIVES

15. There are certain errors which are not
disclosed by a trial balance.
Does not provide detailed information about
ledger accounts.
It is not a substitute of financial statements.
LIMITATIONS OF TRIAL BALANCE

16. Errors
Disclosed
by trial
balance
Not
disclosed by
trial
balance

17. 1. Posting of wrong amount: Wrong amount posted
in the ledger in one of the two accounts
involved. For example, received Rs. 450 from
Mr. A and wrongly posted to his account as Rs.
540
2. Posting to wrong side: For example, if discount
allowed to customer Rs. 100 is posted to the
credit side of the discount allowed, trial balance
will not match.
ERRORS DISCLOSED BY TRIAL BALANCE

18. 3. Omission to post from journal: For example, if goods
purchased from A are recorded in purchases a/c but
omitted to be posted to A’s account in the ledger, the
credit side of the trial balance shall fall short
4. Carrying wrong amount to the trial balance: When a
wrong amount is carried from ledger to the trial
balance, it would cause disagreement of the trial
balance. For example, a balance of Rs. 580 in Mohan
a/c wrongly recorded as Rs. 850 in the trial balance.

19. 5. Wrong totalling or balancing of ledger accounts: If
some error is committed while totalling or balancing
of ledger accounts, the wrong balance shall be carried
to the trial balance and the trial balance will not
agree.
6. Wrong totalling of trial balance: If there is an error
in totalling the two sides of the trial balance, the trial
balance does not agree.

20. 1. Errors of omission: If a transaction is omitted
to be recorded in the books of original entry,
i.e. journal, both debit and credit aspects will
not be posted in the ledger and hence the trial
balance will not be affected. For example,
goods purchased from Sohan omitted to be
recorded in the journal.
ERRORS NOT DISCLOSED BY TRIAL BALANCE

21. 2. Incorrect amount recorded: If an incorrect amount is
recorded in the books of journal, both debits and credits
shall still be equal and the trial balance will agree. For
example, sale of Rs. 10000 wrongly recorded as Rs. 100 in
sales book.
3. Errors of compensatory nature: When two or more errors
are made in such a manner that they neutralize the effect
of each other, it will not cause any disagreement in the
trial balance. For example, Rs. 500 not debited to some
account is compensated if the same amount is not
credited to some other account.