The basic book of accounting is called journal. Precisely it is the book of prime entry which means – Day book. Trader records his total daily transactions in it. The process of recording the transactions into journal is called ‘Journalizing’.
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Journal may be described as a book in which the transactions are recorded in the order of occurrence i.e. in chronological order. It is called a book of prime entry or original entry because all business transactions are entered first in this book. The process of writing a transaction in journal is known as journalizing and the transaction written in journal is known as journal entry.
The functions of journal are:
- To analyze each transaction into debit and credit so as to enable their posting in the ledger.
- To arrange transactions, chronologically in order of date.