Q. Uses of journal in accounting?
Organizing journal entries in a computerized system is different than in a manual system. The computer usually asks for the number of the account to be debited. Subsequent to you type the account number the computer shows the account title in its proper position. The cursor after that moves to the debit column and waits for you to enter the amount of the debit. Subsequently it asks if there are more debits otherwise the computer prompts you for the account number of the credit. Subsequent to you type the account number the computer supplies the account name of the credit and enters the same amount debited as the credit. When there is additional than one credit you are able to override the amount and enter the correct amount. Then you would insert the other credit in the same way. If your debits and credits aren't equal the computer warns you and makes you correct the error. You are able to supply an explanation for the entry from a standard list or type it in. As you insert the journal entries the computer automatically posts them to the ledger accounts. Whenever, you are able to have computer print a trial balance.
A summary of the functions and merits of using a journal follows:
The journal
- Documented transactions in chronological order.
- Demonstrate the analysis of each transaction in debits and credits.
- Supplies an explanation of every transaction when necessary.
- Supply as a source for future reference to accounting transactions.
- Eradicates the need for lengthy explanations from the accounts.
- Formulate possible posting to the ledger at convenient times.
- helps in maintaining the ledger in balance because the debit(s) should always equal the credit(s) in each journal entry.
- Aids in tracing mistakes when the ledger is not in balance.