Session 8 - Preparation of Journal

Practice/Practical/Practicum Session Plan : Preparation of Journal

Introduction (5 min): Explain the role of Journal as the book of original entry.

Format & Structure (10 min): Discuss date, particulars, debit, credit, and narration columns.

Rules of Journalising (10 min): Apply Golden Rules of Accounting to identify debit & credit.

Illustrative Examples (15 min): Record sample transactions (capital introduced, purchases, rent, sales).

Recap & Q/A (5 min): Summarize steps in journal preparation and clarify doubts.

Instruction for Practice/Practical/Practicum : (PDF, PPT)

Preparation_of_Journal.pptx 

Practice Material (IV Quadrant Approach)

(Q1) : Practice Questions/Problems (PDF Formats)

Preparation of Journal

A journal is the book of original entry where all business transactions are first recorded in chronological order using the double-entry system.

Steps to Prepare a Journal Entry

1. Identify the Transaction

• Understand the nature of the transaction and which accounts are involved (e.g., Cash, Sales, Rent, Furniture).

2. Classify the Accounts

Determine the type of each account:

• Personal (related to individuals or firms)

• Real (assets and liabilities)

• Nominal (expenses, losses, income, gains)

3. Apply Golden Rules of Accounting

Type of Account Debit Credit

Personal The receiver The giver

Real What comes in What goes out

Nominal All expenses and losses All incomes and gains

4. Determine Debit and Credit Accounts

• Apply the golden rules to decide which account gets debited and which gets credited.

5. Write the Journal Entry in Proper Format

🧾 Journal Format

Date Particulars L.F. Debit (₹) Credit (₹)

YYYY-MM-DD [Account to be Debited] Dr. XXXX

To [Account to be Credited] XXXX

(Narration: Short explanation)

L.F. = Ledger Folio (used to reference the ledger page, optional in manual bookkeeping)

Examples of Journal Entries

Example 1: Owner Invested ₹50,000 in Business

Date: July 1, 2025

Cash A/C                    Dr. ₹50,000 

     To Capital A/C                          ₹50,000 

(Being capital introduced by the owner)

Example 2: Purchased Furniture for ₹5,000 in Cash

Date: July 3, 2025

Furniture A/C              Dr. ₹5,000 

     To Cash A/C                              ₹5,000 

(Being furniture purchased for cash)

Example 3: Paid ₹2,000 for Office Rent

Date: July 5, 2025

Rent A/C                     Dr. ₹2,000 

     To Cash A/C                               ₹2,000 

(Being rent paid in cash)

Tips for Journal Preparation

• Always write debit entries first, aligned to the left.

• Write credit entries below, indented to the right with "To".

• Include narration for each entry (in brackets).

• Make sure debit = credit in each entry.

• Record transactions as they occur (chronological order).

(Q2) : Video Based Content (Youtube): www.youtube.com/watch?v=YL-eqXl8vW4 

(Q3) : Formative Assessment (Google Form/Any Other Online Quiz Platform): forms.fillout.com/t/tJH7wCpQHHus