Question

Which of the following statements best explains the relationship between journal and ledger?

• A. First recording in journal and then posting to ledger completes the double entry of the transaction.
• B. The journal is the book of original entry whereas the ledger is the book of second entry.
• C. The journal is the book for analytical record and ledger is the book for chronological record.
• D. The process of recording in ledger is called journalizing, which follows the process of recording transactions in journal.

Answer 1

Answer: (B)

The journal is the book of original entry whereas the ledger is the book of second entry.

Journal and Ledger are the two pillars which create the base for preparing final accounts.

The journal is a book where all the transactions are recorded immediately when they take place which is then classified and transferred into concerned account known as Ledger. Journal is also known as book of primary entry, which records transactions in chronological order.

On the other hand, Ledger, or otherwise known as principal book implies a set of accounts in which similar transactions, relating to person, asset, revenue, liability or expense are tracked. The journal is a subsidiary day book, where ,monetary transactions are recorded for the first time, whenever they arise. Ledger is a principal book which comprises a set of accounts, where the transactions are transferred from the journal.

The difference between journal and ledger is that journal is known as the book of original entry, but ledger is a book of second entry.