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What is the Significance of keeping Records as Journal Entry?
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What is the Significance of keeping Records as Journal Entry?
The recording of financial data (taken usually from a journal voucher) pertaining to business transactions in a journal such that the debits equal credits. Journal entries provide an audit trail and a means of analyzing the effects of the transactions on an organization's financial position.
Since the transactions are kept recorded in journal chronologically with narration, it can be easily ascertained when and why a transaction has taken place.
For each and every transaction which of the two concerned accounts will be debited and which account credited, are clearly written in journal. So, there is no possibility of committing any mistake in writing the ledger.
Since all the details of transactions are recorded in journal, it is not necessary to repeat them in ledger. As a result ledger is kept tidy and brief.
Journal shows the complete story of a transaction in one entry.
The following are the importance of journal:-
Each transaction is recorded as soon as it takes place. So there is no possibility of any transaction being omitted from the books of account.
Since the transactions are kept recorded in journal chronologically with narration, it can be easily ascertained when and why a transaction has taken place.
For each and every transaction which of the two concerned accounts will be debited and which account credited, are clearly written in journal. So, there is no possibility of committing any mistake in writing the ledger.
Since all the details of transactions are recorded in journal, it is not necessary to repeat them in ledger. As a result ledger is kept tidy and brief.
Journal shows the complete story of a transaction in one entry.
Any mistake in ledger can be easily detected with the help of journal.
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What is the Significance of keeping Records as Journal Entry?
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What is the Significance of keeping Records as Journal Entry? for Class 11 2024 is part of Class 11 preparation. The Question and answers have been prepared according to the Class 11 exam syllabus. Information about What is the Significance of keeping Records as Journal Entry? covers all topics & solutions for Class 11 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is the Significance of keeping Records as Journal Entry?.
What is the Significance of keeping Records as Journal Entry? for Class 11 2024 is part of Class 11 preparation. The Question and answers have been prepared according to the Class 11 exam syllabus. Information about What is the Significance of keeping Records as Journal Entry? covers all topics & solutions for Class 11 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is the Significance of keeping Records as Journal Entry?.
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