Question
Distinguish between Journal and Ledger.
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Basis
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Journal
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Ledger
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1.
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Nature of Book
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It is a book of primary entry.
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It is a book of final entry.
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2.
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Basis for preparation
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Primary documents (such as vouchers, receipts, etc.) are the basis for recordng transactions in the journal.
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Journal is the basis for recording transactions in the ledger.
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3.
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.Stage of Recording
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Recording in the joumal is the first stage.
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Recording in the ledger is the second stage.
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4.
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Object
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It is pepared to record all transactions in a chronologlcal order.
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It is prepared to see the net effect of various transaction affecting a particular account.
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5.
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Format
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Joumal has five columns:
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Ledger has four identical columns on debit and credit sides:
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i.
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Sold goods costing ₹ 1,20,000 to Charu at a profit of $33\frac{1}{3}\%$ on cost less 15% Trade Discount.
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ii.
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Sold goods costing ₹ 80,000 to Arun against cheque at a profit of 25% on cost less 15% Trade Discount.
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iii.
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Paid by cheque ₹ 8,400 as insurance premium for a period of 12 months starting 1st August 2016. Financial year closes on 31st March every year.
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