Journal Proper
Journal Proper: Original records of a transaction that do not fit into any of the subsidiary books of accounting owing to their significance or rarity of occurrence are kept in the Journal Proper. It’s also known as a Miscellaneous Diary, and it’s similar to any other journal in appearance.
A journal proper [or General Journal] is a basic book that keeps track of commercial transactions in a chronological order. In today’s accounting systems, the utility of this book is severely limited.
Only those transactions are entered in this book that cannot be readily documented in any of the other books of original entry, i.e. subsidiary books, or that are not sufficiently frequent to justify the creation of a dedicated book for them.
Sample Format of a Journal Proper
| Date | Particulars | L.F | Debit | Credit |
Types of entries that are entered in the journal proper:
- Opening Entries
- Closing Entries
- Rectification Entries
- Transfer Entries
- Adjustment Entries
- Miscellaneous Entries
OPENING ENTRIES
Opening entries are made at the start of a financial period, as the name implies. By documenting the obligations, capital, and assets from the previous year, the balances listed in the previous year’s balance sheet are brought forward.
Example
The rule to be applied to make an opening entry is
| Assets A/C | Debit |
| To Liabilities A/C | Credit |
| To Capital A/C | Credit |
Sample Format of an Opening Entry in a Journal Proper
| Date | Particulars | LF. | Debit | Credit |
| mm/dd | Cash A/C | 35,000 | ||
| Furniture A/C | 15,000 | |||
| To Sundry Creditors A/C | 24,000 | |||
| To Capital A/C | 26,000 |
All amounts mentioned in the sample format are the closing balances of the previous year balance sheet.
CLOSED ENTRIES
Closing entries are reported at the conclusion of a financial period and are connected to nominal accounts, almost the polar opposite of opening entries. The funds in these accounts are transferred to trading and profit and loss accounts, and the accounts are closed. Closing entries are entered with the use of a journal proper and then registered in the ledger since a record cannot be included in the ledger without a journal entry.
Example
| Profit & Loss A/C | Debit |
| To Salaries A/C | Credit |
At the end of a period Salary account is closed by transferring its balance to profit and loss account.
RECTIFICATION ENTRIES
Erasing or eliminating a journal entry after it has been entered is a no-no in the accounting world. Only another entry in the journal should be used to remedy a mistake.
Example
A purchase for 10,000 was omitted by mistake, it belonged to Unreal Pvt Ltd.
Rectification entry, in this case, will be
| Purchase A/C | 10,000 |
| To Unreal Pvt Ltd. | 10,000 |
TRANSFER ENTRIES
To put it simply, a transfer entry is used to move an item from one account to another. Journal entries are used to make all of these transactions.
Let us take an example where a general reserve is created for a business by transferring 5,00,000 from the profits.
| Date | Particulars | LF. | Debit | Credit |
| mm/dd | Profit & Loss A/C | 5,00,000 | ||
| To General Reserve | 5,00,000 |
ADJUSTMENT ENTRIES
Advances paid or received at the conclusion of a financial period may need adjustments to costs or revenues; these changes are accomplished with the use of a journal entry. They’re quite prevalent towards the conclusion of a fiscal year. Adjustment entries are most often used for accrual or depreciation inputs.
Example
There are outstanding wages of 50,000 which need to be accounted for
| Date | Particulars | LF. | Debit | Credit |
| mm/dd | Wages A/C | 50,000 | ||
| To Outstanding Wages A/C | 50,000 |
Miscellaneous Entries
There are more entries that may be entered in a diary other from the ones listed above.
- Discount was granted and accepted.
- Other than commodities, purchase or sale of objects on credit
- Accidental consequences, such as fire losses
- Transactions involving consignment and joint ventures
- Bills of exchange endorsement and dishonour
- Transaction involving items that were given out as samples.
- Assets that are no longer needed are sold.