Distinction between Journal and Ledger - QS Study
QS Study

Distinction between Journal and Ledger:

Books of original entry (Journal) and Ledger can be distinguished as follows:

Journal

  • Book: It is the book of prime entry.
  • Stage: Recording of entries in these books is the first stage
  • Process: The process of recording entries in these books is called “Journalizing”.
  • Transactions: Transactions relating to a person or property or expense are spread over.
  • Net effect: The final position of a particular account cannot be found.
  • Next Stage: Entries are transferred to the ledger.
  • Tax authorities: Do not rely upon these books.

 

Ledger

  • Book: It is the main book of Account.
  • Stage: Recording of entries in the ledger is the second stage.
  • Process: The process of recording entries in the ledger is called “Posting”.
  • Transactions: Transactions relating to a particular account are found together on a particular page.
  • Net effect: The final position of a particular account can be ascertained just at a glance.
  • Next Stage: From the Ledger, first the Trial Balance is drawn and then final accounts are prepared.
  • Tax authorities: Rely on the ledger for assessment purpose.