Chapter 2Meaning of Journal: The term journal is derived from the French word jour which means a day. Journal therefore, means a day book or a daily record. It is the book wherein all the transactions are first recorded in the order. It is the book wherein all the transactions are first recorded in the order of dates i.e., as and when they take place.The act of recording a transaction in the journal (i.e. the process of making an entry in the journal) is called journalizing. The record of a transaction in the journal is called journal entry.Features of journal:1. The journal is a book of prime, original or first entry, as all business transactions are first recorded in the journal.2. Journal can be regarded as the queen of books of accounts, subordinate to the king of books of account viz.ledger3. The journal analyses the various transactions into their debits and credits so that they could be easily posted to the ledger accounts. In other words, the journal is helpful in the preparation of accounts in the ledger. It is for this reason that the journal is called the gateway to the ledger.Advantages of journal:1. The journal provides the chronological(date-wise)record of all the business transactions2. As the business transactions are recorded in the journal in chronological order the journal facilitates quick and easy reference to any transaction.3. As both the debit and credit aspects of each transaction are entered in the journal together in one entry, journal provides a complete record of each transaction in one place.4. By providing narration, that is a brief explanation, to each entry just below the entry; journal helps one to understand the purpose and the nature of the entry.5. Journal helps in the understanding of the principles of double-entry system, as entries in the journal are classified into debits and credits.6. It avoids the necessity of making entries in the ledger immediately.7. The maintenance of the journal, besides the ledger, facilitates cross checking and helps in the checking of the arithmetical accuracy of the books of accounts.8. It is easier to post from the journal to the ledger, as it can be easily ascertained from the journal as to which account is to be debited and which account is to be credited9. Journal reduces the possibilities of errors as the amounts to be debited and credited are written side by side in the journal.10. Journal makes the detection of errors easy because the entries in the journal are made date-wise.Limitations of journal.1. If all the business transactions are recorded in the journal, the journal will become very bulky.2. The work of writing up of the journal is laborious and tedious.3. Journal will not be helpful to a businessman in knowing the cash balance, bank balance debtors balance, creditors balance sales purchase etc., each day.4. A journal is only a subsidiary book. It is not a book of final entry. That means, a journal will not provide final information on the various matters of business.5. It is useful only for a small concern with a low volume of business transactions.

Other relative terms connected with this chapter:Simple journal entry:If a journal entry contains only one debit and only one credit, it is called a simple journal entry.Compound journal entry:If a journal entry contains more than one debit or more than one credit or more than one debit and more than on credit it is called a compound journal entry or combined journal entry.Opening entry:In the case of a concern which had been in existence in the previous year, the ledger account balances of the previous year have to be brought forward and recorded in the journal as opening balances at the beginning of the current year through an entry called opening entry.