The Journal — Writing It Down

It is Wednesday morning. Meera arrives at Sharma Sir's office to find a neat stack of vouchers on her desk — all from Rawat Aunty's shop. Yesterday, she learned what vouchers are. Today, Negi Bhaiya places a thick ruled notebook in front of her. "This," he says, tapping the cover, "is a journal. You know how people write diaries? Every night they write what happened that day? A journal is the diary of a business. Every transaction, in the order it happened, written here." He opens it to a blank page. "Today, you will fill an entire page."

What is a Journal?

In your personal life, you might keep a diary. You write the date, then you write what happened that day. "Went to the market. Met Priya. Bought new chappal for Rs. 300."

A journal is the same thing — but for a business.

It is a book where you record every transaction, one by one, in the order they happened. Each entry has the date, the accounts affected, the amounts, and a short description.

The journal is also called the "Book of Original Entry" because this is the first place a transaction gets recorded. The voucher is the proof. The journal is the record.

Sharma Sir explains:

"Think of it this way, Meera. The voucher is like a photograph — it captures one moment. The journal is like a film — it tells the whole story, scene by scene, in order."

The Journal Format

Every journal has five columns. Meera looks at the blank page and sees the column headings:

Let us understand each column:

Date — The date when the transaction happened. You write it once. If multiple transactions happen on the same date, you write the date only for the first entry. For the rest, you write "—" or leave it blank.

Particulars — This is where you write the account names and a narration. It follows a specific pattern:

• First line: The account being debited, followed by the letters "Dr."
• Second line: Starts with "To" and then the account being credited
• Third line: The narration in brackets — a short description of what happened

L.F. (Ledger Folio) — This is the page number in the ledger where this account is posted. You fill this later, when you transfer entries to the ledger. For now, leave it blank.

Debit (Rs.) — The amount being debited. Written on the same line as the debit account.

Credit (Rs.) — The amount being credited. Written on the same line as the credit account.

How to Write a Journal Entry — Step by Step

Sharma Sir walks Meera through the process:

Step 1: Read the voucher carefully. What happened? Who paid whom? How much?

Step 2: Identify the two accounts involved. Every transaction affects at least two accounts. (Remember double-entry from the earlier chapter?)

Step 3: Decide which account is debited and which is credited. Apply the rules:

• Assets increase → Debit
• Assets decrease → Credit
• Expenses increase → Debit
• Income increases → Credit
• Liabilities increase → Credit
• Liabilities decrease → Debit

Step 4: Write it in the journal. Follow the format exactly.

Step 5: Write the narration. Keep it short and clear.

Step 6: Draw a line under the entry. This separates one entry from the next.

Let us see a simple example.

Example Entry

Voucher: Rawat Aunty pays Rs. 5,000 rent for July 2025.

Step 1: Rent paid in cash. Rs. 5,000.

Step 2: Two accounts — Rent Account and Cash Account.

Step 3: Rent is an expense. Expenses increase on the debit side. So Rent A/c is debited. Cash is going out. Assets decrease on the credit side. So Cash A/c is credited.

Step 4 & 5: Write it:

That is one complete journal entry. Let us now do a full day.

Meera Journals a Full Day

It is 15th July 2025. Rawat Aunty had a busy day. Here are all the transactions that happened at Rawat General Store. Meera has the vouchers in front of her. She is going to record every single one.

Transaction 1: Opening Cash Balance

Rawat Aunty starts the day with Rs. 25,000 in the cash box. (This was already recorded. Meera does not need a new entry for this — it is the closing balance from yesterday.)

Transaction 2: Purchased Goods for Cash

Rawat Aunty bought stock (rice, dal, sugar, oil) from Haldwani wholesaler for Rs. 12,000. Paid in cash.

Why? Purchases is an expense — debit it. Cash is going out — credit it.

Transaction 3: Sold Goods for Cash

A customer bought groceries worth Rs. 1,800. Paid cash.

Why? Cash is coming in — debit Cash A/c. Sales is income — credit it.

Transaction 4: Sold Goods on Credit

Joshi Ji, a regular customer, bought goods worth Rs. 3,500 on credit (he will pay later).

Why? Joshi Ji now owes money — he is a debtor. Debtors are assets. Assets increase on the debit side. Sales is income — credit it.

Notice: Cash A/c is NOT involved here. No cash was exchanged. Instead, Joshi Ji's personal account is debited.

Transaction 5: Received Cash from a Debtor

Dimri Ji, who owed Rs. 2,500 from last week, came and paid his full balance in cash.

Why? Cash coming in — debit Cash. Dimri Ji's debt is now settled — credit his account to reduce what he owes.

Transaction 6: Paid Salary

Paid Rs. 4,000 salary to helper Kamla Devi.

Why? Salary is an expense — debit it. Cash going out — credit it.

Transaction 7: Paid Rent

Paid Rs. 5,000 shop rent to landlord Pant Ji.

Transaction 8: Paid Electricity Bill

Paid Rs. 1,200 electricity bill in cash.

Transaction 9: Deposited Cash into Bank

Rawat Aunty deposited Rs. 5,000 into her SBI bank account.

Transaction 10: Purchased Goods on Credit

Bought goods worth Rs. 8,000 from Bisht Traders on credit (will pay next month).

Why? Purchases is an expense — debit. Bisht Traders is a creditor now (we owe them) — credit.

Transaction 11: Sold Goods for Cash

Afternoon sale. Various customers bought goods totaling Rs. 4,200. All cash.

Transaction 12: Owner's Drawing

Rawat Aunty took Rs. 2,000 from the shop cash for personal use (her daughter's school fees).

Why? Drawings reduce the owner's capital — debit Drawings A/c. Cash goes out — credit Cash A/c.

This is important: when the owner takes money for personal use, it is NOT a business expense. It is a drawing. It reduces the owner's stake in the business.

The Complete Journal Page

Here is Meera's completed journal page for 15th July 2025:

Meera adds up both columns. Debit total = Rs. 49,200. Credit total = Rs. 49,200. They match!

Sharma Sir looks over her shoulder. "Good. The totals match. That is how you know you have not made a mistake. In the journal, the total of all debits must ALWAYS equal the total of all credits."

Compound Journal Entries

Sometimes, a single transaction involves more than two accounts. This is called a compound entry.

Example: Rawat Aunty buys goods worth Rs. 6,000 from a supplier. She pays Rs. 4,000 in cash and the remaining Rs. 2,000 on credit.

Three accounts are involved:

• Purchases A/c (goods coming in) — Debit Rs. 6,000
• Cash A/c (cash going out) — Credit Rs. 4,000
• Supplier A/c (credit balance) — Credit Rs. 2,000

Notice: The debit side (Rs. 6,000) still equals the credit side (Rs. 4,000 + Rs. 2,000 = Rs. 6,000). The golden rule of double-entry never breaks.

Common Mistakes Beginners Make

Negi Bhaiya warns Meera about mistakes he used to make:

1. Forgetting the narration. Without a narration, no one will know what the entry means six months later.

2. Writing the credit account first. Always write the debit account first, then the credit account with "To" before it.

3. Not drawing a line between entries. Without lines, entries blur together and it becomes confusing.

4. Wrong debit/credit. If you are unsure, go back to basics. Ask: what type of account is it (asset, liability, expense, income, capital)? Then apply the rule.

5. Mismatched totals. If your debit total and credit total do not match at the bottom of the page, there is a mistake. Go back and check every entry.

Quick Recap

• A journal is the book of original entry — the "diary" of a business.
• Format: Date | Particulars | L.F. | Debit | Credit
• The debit account is written first, followed by "Dr."
• The credit account is written second, starting with "To."
• The narration (in brackets) explains what happened.
• L.F. (Ledger Folio) is the page number in the ledger — filled in later.
• In a compound entry, more than two accounts are involved, but debits still equal credits.
• At the bottom of every page, total debits must equal total credits.
• No narration = unclear entry. Always write the narration.

Practice Exercise — Try This Yourself

Record the following transactions in journal format for Rawat General Store on 20th July 2025:

1. Started business with Rs. 50,000 cash.
2. Opened a bank account with SBI and deposited Rs. 30,000.
3. Bought shop furniture for Rs. 12,000, paid by cheque.
4. Purchased goods worth Rs. 15,000 on credit from Bisht Traders.
5. Sold goods for Rs. 6,000 cash.
6. Sold goods worth Rs. 4,000 on credit to Dimri Ji.
7. Received Rs. 2,000 from Dimri Ji.
8. Paid Rs. 800 for shop cleaning (miscellaneous expense).

After recording all entries, add up the debit and credit columns. Do they match?

Hints:

• Transaction 1: Cash A/c Dr., To Capital A/c
• Transaction 2: SBI Bank A/c Dr., To Cash A/c (this is a contra entry)
• Transaction 3: Furniture A/c Dr., To SBI Bank A/c
• For the rest, follow the same logic. Identify the two accounts. Decide debit and credit. Write the narration.

Fun Fact

The word "journal" comes from the French word jour, which means "day." So a journal is literally a "daily" record. And the French got it from the Latin word diurnalis, meaning "of the day." Across languages and centuries, the idea is the same — write down what happened, every day, without fail. Meera is now part of this centuries-old tradition!

In the next chapter, Meera will take all these journal entries and organize them into separate accounts — that is called the ledger. Think of the journal as a story told in order. The ledger is the same story, sorted by character.