It must have been understood by this time that Journal is used for recording only those transactions for which there is no special subsidiary book. Moreover, if the number of transactions of a particular type (say returns inward or outward) is not large, there is no point in having a separate subsidiary book for such transactions. These transactions may be journalized. The method of recording transactions in Journal has already been explained.

Following transactions are still recorded in the journal:

1.     Opening entries:- At the beginning of the year, the opening balances of assets and liabilities are journalized.

2.   Closing Entries:- At the end of the year final accounts are prepared. For preparing these accounts various are to be transferred to the trading and profit and loss account which is done by means of journal entries.

3.   Rectification entries:- When any error is detected in writing up the books then it is rectified by means of suitable journal entry.

4.   Adjustment entries:- Since accounting follows “accrual concept” therefore adjustment has to be done at the end of the year regarding:

a)      Expenses incurred but not paid,

b)     Expenses paid but benefit to be available in the next period,

c)      Income becoming due but not received,

d)     Income received in advance, and

e)     Charging depreciation on fixed assets, etc.

5.   Transfer entries:- If any amount is to transferred from one ledger account to the other, then it is done by means of journal entries.

6. Miscellaneous entries:-a.) Purchase and sale of fixed asses on credit,
b.) Writing off of losses due to bad debt, fire, accidents etc,

c.) Any extra concession to be allowed to any customer or any charge to be levied after the issue of the invoice, and

d.) Any other item for which no subsidiary book has been maintained.

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