Journal proper

  • Journal Proper is a residuary book after the sub-division of Journal and records only those transactions that cannot be recorded in any other subsidiary book.
  • Transactions recorded in journal are opening entry, closing entry, adjustment entries, transfer entries, rectifying entries and miscellaneous entries.
  • Opening entry is recorded at the beginning of a financial year to compute closing balances of various assets, liabilities and capital appearing in the Balance Sheet of previous accounting period, to the books of current accounting period.
  • Closing entry is passed at the end of the year to close accounts relating to expenses and revenues by transferring them to the Trading and P & L A/c.
  • Adjustment entry is passed in order to update ledger account on accrual basis, such entries that are made at the end of the accounting period, example, outstanding expenses, prepaid expenses, depreciation on fixed assets, interest on capital, etc.
  • Transfer entry is passed for transferring an amount or the balance of one account to another such as transferring the balance of Drawings A/c to Capital A/c. Rectifying entry is passed to rectify  errors while journalising, posting, totaling, balancing, etc.
  • Miscellaneous entries that are passed through Journal Proper are, purchase or sale of an asset on credit, writing off bad debts, discount allowed and discount received, abnormal loss of stock or other assets by fire, theft, etc., goods taken by proprietor for personal use, etc.

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