Journal Questions and Answers [With PDF]
The journal is where every transaction makes its first appearance in the books. Learning to write a correct journal entry is one of the most useful skills in accounting, and it is tested in almost every exam. Here are 30 important questions with simple answers, a ready-to-use format and a worked example.
This is Chapter 6 of our Accounting course. Revise Double Entry System first if debit and credit still feel confusing.
Meaning, Features and Importance
Q1. What is a journal?
A journal is a book of account in which business transactions are recorded for the first time, in date order, with the accounts to be debited and credited and a short explanation (narration).
Q2. What are the other names of a journal?
- Book of original entry
- Primary book
- Day book
Q3. What are the features of a journal?
- It is the first book in which a transaction is recorded.
- Entries are made day by day in date order.
- Each transaction is analysed under the double entry system, with one account debited and another credited.
- Every entry has a narration that explains it.
- It uses a fixed format with columns.
- Debit and credit totals are always equal.
- It serves as permanent evidence of the transaction.
Q4. What are the objectives and benefits of a journal?
- It records each transaction fully in one place.
- It gives a clear explanation of every transaction.
- It saves time, because different books can be kept for different types of transactions.
- It reduces errors, because debit and credit are compared at the time of entry.
- Work can be shared among staff.
- It is kept for future reference and verification.
- It makes posting to the ledger simple and neat.
Q5. What is the role of the journal in the recording process?
- It shows both effects of a transaction together.
- It keeps transactions in time order.
- It helps prevent and detect errors, because debits and credits can be compared easily.
Q6. Why is it important to keep a journal?
- Posting to the ledger becomes easy, because entries are already analysed.
- Transactions can be counted for any date, week or month.
- It confirms that the double entry rule has been followed.
- It reduces omissions in the ledger.
- It serves as proof in future disputes.
Q7. Why is the journal called the primary book?
Because every transaction is recorded in it first, as soon as it happens. Other books, such as the ledger, are prepared from it.
Q8. Why is the journal sometimes called a subsidiary book?
Some textbooks call the journal a subsidiary book of the ledger, because it supports the ledger: entries are recorded in the journal first and then posted to the ledger, which is the principal book. Do not confuse this with subsidiary books (special journals) such as the purchases book, which are divisions of the journal.
Q9. How is the journal classified?
Into two kinds: special journals (subsidiary books) for repeated transactions of the same type, and the journal proper (general journal) for all other transactions.
Q10. What are the benefits of classifying the journal?
- It saves time and labour.
- Posting to the ledger is simpler, because totals can be posted.
- Information on each type of transaction is easy to find.
- Work can be divided among several staff, which improves efficiency.
- It reduces mistakes and makes fraud harder.
Special Journals (Subsidiary Books)
Q11. What is a special journal?
A special journal is a part of the journal that records only one kind of transaction, such as credit purchases or credit sales.
Q12. What are the main kinds of special journals?
| Book | Records |
|---|---|
| Purchases journal | Credit purchases of goods |
| Sales journal | Credit sales of goods |
| Returns inward (sales returns) journal | Goods returned by customers |
| Returns outward (purchases returns) journal | Goods returned to suppliers |
| Cash book | All cash and bank receipts and payments |
Q13. What is the purchases journal?
It records only credit purchases of goods meant for resale. Cash purchases and purchases of assets are not entered here.
Q14. What is the sales journal?
It records only credit sales of goods. Cash sales go to the cash book.
Q15. What is the returns inward journal?
It records goods that customers return to the business because they are damaged, wrong or unwanted. It is also called the sales returns book.
Q16. What is the returns outward journal?
It records goods that the business returns to its suppliers. It is also called the purchases returns book.
Q17. What is a cash book?
The cash book records all cash receipts and payments. It acts as a journal and as a ledger for the cash account at the same time. Read more in the Cash Book chapter.
Q18. What is a cash receipts journal?
It is the receipts side of the cash book. It records all cash and cheques received by the business.
Q19. What is a cash payments journal?
It is the payments side of the cash book. It records all cash and cheques paid by the business.
Journal Proper
Q20. What is the journal proper?
The journal proper (general journal) records transactions that do not belong in any special journal. These are mostly non-cash and occasional entries.
Q21. What kinds of entries go in the journal proper?
- Opening entries
- Adjusting entries
- Rectification entries
- Closing entries
- Reversing entries
Q22. What are adjusting entries?
Entries made at the end of the period to bring the accounts up to date before the final accounts are prepared, such as outstanding expenses, prepaid expenses, accrued income and depreciation.
Q23. What are rectification entries?
Entries made to correct errors that were found after the original entry was posted, for example when an entry was made in the wrong account.
Q24. What are closing entries?
Entries made at the end of the period to close all nominal accounts (income and expenses) and transfer their balances to the profit and loss account, so that the new period starts with a clean slate.
Q25. What are opening entries?
Entries made at the start of a new period to bring forward the balances of assets, liabilities and capital from the previous period. They are also used when a business starts using a new set of books.
Journal Entries in Practice
Q26. What is a simple journal entry?
An entry that affects only two accounts, one debited and one credited. Example: bought furniture for 5,000 cash. Furniture A/c is debited and Cash A/c is credited.
Q27. What is a compound journal entry?
An entry that involves three or more accounts, with several debits, several credits, or both. Example: bought goods worth 10,000, paid 6,000 in cash and the rest on credit from Karim.
| Account | Debit | Credit |
|---|---|---|
| Purchases A/c | 10,000 | |
| To Cash A/c | 6,000 | |
| To Karim A/c | 4,000 |
Q28. What is journalizing, and what is its procedure?
Journalizing means writing transactions in the journal. Follow these steps for every entry:
- Date: write the year, month and day of the transaction.
- Particulars: write the account to be debited first, then the account to be credited with the word To before it.
- Narration: write a brief explanation, starting with Being.
- L.F. (folio): leave it blank until the entry is posted, then write the ledger page number.
- Amounts: write the amount in the debit column against the debited account and in the credit column against the credited account. Both must be equal.
- Draw a line under each entry to separate it from the next.
Q29. What is the format of a journal?
| Date | Particulars | L.F. | Debit | Credit |
|---|---|---|---|---|
| 2026 Jan 1 | Cash A/c …….. Dr. | 50,000 | ||
| To Capital A/c | 50,000 | |||
| (Being capital introduced by the owner) |
Q30. What are the journal entries for these common transactions?
| No. | Transaction | Debit | Credit | Amount |
|---|---|---|---|---|
| 1 | Owner brings capital in cash | Cash A/c | Capital A/c | 50,000 |
| 2 | Goods bought for cash | Purchases A/c | Cash A/c | 20,000 |
| 3 | Goods sold for cash | Cash A/c | Sales A/c | 12,000 |
| 4 | Goods returned to creditor Karim | Karim A/c | Purchases Returns A/c | 1,500 |
| 5 | Owner withdraws cash for personal use | Drawings A/c | Cash A/c | 3,000 |
| 6 | Furniture bought for cash | Furniture A/c | Cash A/c | 8,000 |
| 7 | Depreciation charged on furniture | Depreciation A/c | Furniture A/c (or Accumulated Depreciation) | 800 |
| 8 | Advertisement expenses paid | Advertisement Expense A/c | Cash A/c | 1,200 |
Quick Revision Points
- The journal is the book of original entry. Transactions are recorded in date order.
- Special journals handle repeated transactions. The journal proper handles the rest.
- Debit comes first, credit second with the word To. Debit total always equals credit total.
- Every entry needs a narration starting with Being.
- Opening, adjusting, rectification, closing and reversing entries all go in the journal proper.
Now take the chapter quiz, then read the next chapter, Ledger.
