What is the difference between Journal and Ledger?

Ledger: It is a book in which all same transactions are recorded in one place. A separate account is prepared to each transaction. After recording the transactions in journal the transactions are posted in ledger book.

Format of Ledger:

Dr.                                                                                                                     Cr.

Date	Particulars	J.F	Amount	Date	Particulars	J.F	Amount

    

There are three types of account: Personal real and nominal account.

Balances in ledger account:

Debit balance of personal account shows the amount owing from him. If there is credit balance of personal account it shows the amount is owing to him.

Real account included cash in hand, furniture, land, goods etc. real account always shows debit balance. Goods a/c, like purchase a/c, sales a/c, purchase return a/c, sales return a/c is not balancing. And at the end of the year a/c is closed by transferring the amount to trading a/c.

Nominal account includes income and expenses of a company and it is also not balanced in ledger book. It is use to know the net profit of the company. An amount is transferred to the trading and profit &loss a/c.

In ledger book the debit side is written “To” and in credit side “By” is written. To balance the transactions “To balance c/d” or “By balance c/d” is written in debit and credit side respectively.

Opening entry is written as “To balance b/d” or “By balance b/d”.

“b/d” is brought down and “c/d” is carried down.

Journal: It is also known as original book of entry. It is a first book in which business transactions are recorded. It follows three rules:

Personal A/c: Debit the giver and credit the receiver.

Real A/c: Debit what comes in and credit what goes out.

Nominal a/c: Debit all expenses and losses and Credit all income and gain.

The detail of each transaction is also recorded in journal entry.

Format of Journal book:

Date	Particulars	L.F	Dr. Amount	Cr. Amount

Difference between ledger and journal:

S.No.	Point of difference	Journal	Ledger
1.	When transactions are recorded in journal and ledger?	The transactions are firstly recorded in Journal.	After recording the transaction in journal, the transactions are classified in separate account which is recorded in ledger.
2.	Accuracy of journal and ledger can be tested or not?	Accuracy of journal entry cannot be tested.	Accuracy of ledger is tested by preparing the trial balance.
3.	Recording the transactions in journal and ledger is known as?	Recording the transactions in journal is known as journalising.	Recording the transactions in ledger is known as posting.
4.	Why journal and ledger is necessary in business?	With the help of journal ledger is prepared.	With the help of ledger financial statement is prepared.
5.	What is called journal book and ledger book?	It is a subsidiary book.	It is a principal book.
6.	How transactions are recorded in journal and ledger book?	The transactions are recorded in chronological manner.	The transactions are recorded in analytical manner.
7.	Journal and ledger book is balanced or not?	Journal book is not balanced.	Ledger book is balanced.
8.	Is a debit and credit side or columns in journal and ledger book?	In journal there is a column for debit and credit amount.	In ledger there is a side for debit and credit amount.