Journal Proper – When & How It Is Used
Also called General Journal or Residuary Journal.
What is Journal Proper?
Definition: A journal used to record transactions that cannot be recorded in any other subsidiary book.
Think of it as: The "Others" category when nothing else fits.
When to Use Journal Proper?
1. Opening Entries
Recording assets and liabilities at the start of accounting period.
Example:
| Particulars | Debit | Credit |
|---|---|---|
| Cash A/c Dr. | 50,000 | |
| Furniture A/c Dr. | 25,000 | |
| To Capital A/c | 75,000 | |
| (Being opening entry) |
2. Closing Entries
Transferring nominal accounts to Trading/P&L Account.
Example:
| Particulars | Debit | Credit |
|---|---|---|
| Sales A/c Dr. | 1,00,000 | |
| To Trading A/c | 1,00,000 | |
| (Being sales transferred to trading account) |
3. Transfer Entries
Transferring one account balance to another.
Example: Transfer of ₹10,000 from Ramesh's account to his son Suresh's account.
| Particulars | Debit | Credit |
|---|---|---|
| Ramesh A/c Dr. | 10,000 | |
| To Suresh A/c | 10,000 | |
| (Being amount transferred as per instructions) |
4. Purchase/Sale of Assets on Credit
Not goods, but fixed assets.
Example: Purchased furniture from Godrej on credit for ₹50,000.
| Particulars | Debit | Credit |
|---|---|---|
| Furniture A/c Dr. | 50,000 | |
| To Godrej A/c | 50,000 | |
| (Being furniture purchased on credit) |
5. Adjustment Entries
Outstanding expenses, prepaid expenses, depreciation, etc.
Example: Salary outstanding ₹5,000.
| Particulars | Debit | Credit |
|---|---|---|
| Salary A/c Dr. | 5,000 | |
| To Outstanding Salary A/c | 5,000 | |
| (Being salary outstanding for March) |
6. Rectification Entries
Correcting errors discovered later.
Example: Rent ₹2,000 wrongly debited to Salary Account.
| Particulars | Debit | Credit |
|---|---|---|
| Rent A/c Dr. | 2,000 | |
| To Salary A/c | 2,000 | |
| (Being wrong debit to salary now corrected) |
7. Depreciation Entries
Example: Depreciation on machinery ₹10,000.
| Particulars | Debit | Credit |
|---|---|---|
| Depreciation A/c Dr. | 10,000 | |
| To Machinery A/c | 10,000 | |
| (Being depreciation charged @ 10%) |
8. Bad Debts Written Off
Example: Ramesh (debtor) became insolvent, ₹5,000 irrecoverable.
| Particulars | Debit | Credit |
|---|---|---|
| Bad Debts A/c Dr. | 5,000 | |
| To Ramesh A/c | 5,000 | |
| (Being bad debt written off) |
9. Goods Withdrawn for Personal Use
Example: Owner took goods worth ₹3,000 for personal use.
| Particulars | Debit | Credit |
|---|---|---|
| Drawings A/c Dr. | 3,000 | |
| To Purchases A/c | 3,000 | |
| (Being goods withdrawn for personal use) |
10. Loss by Fire/Theft (Uninsured)
Example: Stock worth ₹20,000 destroyed by fire, not insured.
| Particulars | Debit | Credit |
|---|---|---|
| Loss by Fire A/c Dr. | 20,000 | |
| To Purchases A/c | 20,000 | |
| (Being stock destroyed by fire) |
What NOT to Record in Journal Proper
| Transaction | Correct Book |
|---|---|
| Cash sales | Cash Book |
| Credit purchase of goods | Purchases Book |
| Credit sale of goods | Sales Book |
| Return of goods to supplier | Purchases Returns Book |
| Return of goods by customer | Sales Returns Book |
Quiz
Test Your Knowledge
Question 1 of 5
1. Journal Proper is used for:
💡 Final Wisdom: "Journal Proper is the Swiss Army knife of accounting - use it when nothing else works!"