20+ Difference between Journal and Ledger

Every transaction in double-entry accounting affects two accounts, as the name implies. The accounting process is the systematic recording of all monetary transactions.

It all begins with a diary entry and progresses through the ledger, trial balance, and finally, the final accounts.

A set of final accounts can’t be prepared without first laying the groundwork in the Journal and the Ledger. The Journal records all transactions before being posted to the Ledger’s respective accounts.

Comparison Between Journal And Ledger

DefinitionAn additional book of accounts known as a journal may be used to maintain a record of one’s financial dealings. This is done so that an audit may be performed on the transactions and a report can be generated.The journal is the lesser of the two books of accounts, but the ledger is the one used to organize journal entries into their respective categories. The information is entered into the ledger to fulfill this goal.
CharacteristicsChronological journal records may verify financial actions. Journals document debit and credit transactions. Two-way data input and processing improve this system. Symmetrical exchanges balance both. Daily journaling ensures accuracy and utilization. Multi-account journals are possible. Each contract contains a little “story” (within brackets). Transaction justification helps.Traditional ledgers list credits on the right and debits on the left. Since purchases include people, assets, expenditures, and revenue, they touch numerous books. Balance ledgers. Credit and debit differ considerably. Balance the books by subtracting. Debit balances arise when debt exceeds credit. Ledger credits this excess.
ExplanationEach entry in the journal includes a comprehensive analysis of the pertinent event that the entry corresponds to. Next to each entry in the diary is where you’ll find these explanations written out. You may find the individual explanations for each entry here, which are included with each entry.Because such particulars are not included in the ledgers, the ledgers do not contain information that is unique to each and every transaction that has ever been conducted.
ResultThe repercussions of a transaction are not shown in the transaction log in their full and complete form in their totality.The entries that are made in a ledger for the purposes of accounting may give insight into the flow of money into and out of a specific account by supplying information on the entries themselves.
Trial balanceThe diary will not be used in any capacity throughout the process of producing the Trial Balance because it will be physically impossible to do so. This is because the journal is incapable of being utilized in any form.It is quite likely that the ledger will be of some use at some point throughout the process of establishing whether or not the trial balance is accurate. This is because the ledger includes all of the transaction data.

Major Difference Between Journal And Ledger

What exactly is Journal?

Journals are supplementary books of accounts used to maintain a record of a company’s financial activity in a manner that is by generally accepted accounting rules.

This record-keeping must be done by GAAP (Generally Accepted Accounting Principles). These occurrences are recorded in a time-stamped and chronological fashion, including information about the accounts that they impacted.

This notion is called “ground zero” in the accounting discipline on occasion.

Key Difference: Journal

  • Whether it be a book, spreadsheet, or data stored in accounting software, a journal is a record of financial transactions. 
  • A journal entry is a business book record that documents a financial transaction. Along with the main ledger, journals are typically examined during a transaction or audit. 
  • Journaling is an integral aspect of objective record-keeping to facilitate clear and succinct reviews and record transfers later in the accounting process. 
  • All of a company’s financial transactions, including sales, costs, cash, inventory, and debt, should be kept in a journal. 
  • The accuracy of a business’s journal is crucial for several reasons, including the speed and accuracy with which mistakes can be discovered and corrected.
  • The standard method of accounting is known as double-entry bookkeeping. It has immediate implications for journal-keeping and journal-entry-recording practices. 
  • Whenever two parties engage in a financial transaction, they exchange funds between their respective accounts. As a result, each journal entry will have two columns. 
  • For instance, a cash purchase of $1,000 worth of merchandise would need two journal entries from the company’s bookkeeper.

What exactly is Ledger?

A ledger is the principal book of accounts, and its major function is to record and organize financial transactions that were previously recorded in a diary.

Its primary goal is to record and organize transactions previously documented in a diary. Because it is employed in the process of creating financial statements such as the Trial Balance, the ledger is sometimes referred to as the book of final entries, which is another word for the ledger.

Key Difference: Ledger

  • A ledger is a book used in accounting where all the data required to create financial statements is recorded. 
  • Numerous accounts culled from journals make up a book of accounts. The whole financial picture includes assets, liabilities, income, costs, and equity. 
  • The ledger is a categorized and summarized list of debits and credits based on the accounting journals, where the first recording of transaction data takes place. 
  • It is sometimes referred to as the “second book of entry” because it serves as a second point of documentation for the information being entered. 
  • Although accounting ledgers are sometimes kept in printed form, electronic records created by accounting software are by far the most popular and convenient option. 
  • Accounts receivable are recorded in the sales ledger, whereas accounts payable are recorded in the purchase ledger. 
  • The general ledger represents both, making it the most crucial book in an accounting system. 
  • For instance, if a company were to receive funds, they would be recorded in the general ledger’s Sales Ledger Control account and the sales ledger itself. 

Contrast Between Journal And Ledger


  • Journal – A journal keeps a detailed record of a company’s financial operations. This record is then used to make modifications and send data to other formal accounting records, such as the general ledger.

    A journal is a double-entry accounting system component responsible for recording the date, accounts affected, and amounts associated with each transaction.
  • Ledger – A journal known as the ledger is where all of a company’s financial actions and statements should be documented.

    All of the components of the balance sheet that make up the general ledger, including property, accounts receivable, account payment, stockholders, liabilities, shares, revenues, taxes, expenses, profit, loss, funds, loans, securities, stocks, salaries, and wages, are included in the general ledger.


  • Journal – Financial transactions may be verified faster using chronological diary entries. Journal entries must capture every transaction’s debit and credit sides. This system is double-entry.

    A matching sum is transferred across accounts. For consistency and convenience, transactions are logged daily in a journal. Multiple accounts and transactions may be reported in one journal entry.

    The narrative, a short account of each agreement, is supplied with each exchange (within brackets). Explaining the deal’s reasoning is helpful.
  • Ledger – Credits are on the right, and debits are on the left in a ledger. Since it involves a person, asset, expense, or income source, a purchase will influence many ledger book accounts.

    A ledger’s debits and credits must balance. However, the debit or credit side may be bigger. If the accounts are to balance, the discrepancy must be recorded on the deficit side.

    Debit balances develop when the debit side of an account owes more than the credit side. The credit side of the ledger records the excess when this happens.


  • Journal – Each time there is a new transaction, a new entry will be put into the journal, and the entries that came before them in the journal were written for the transactions that came before them in the journal.

    Transactions will continue to be recorded in the journal until it is closed. A fresh entry will be placed into the diary each time a new transaction occurs. This will continue until the journal is full.
  • Ledger – Following the writing of each entry in the journal, that entry is then copied, one at a time, into the ledger that is kept in a location that is distinct from the journal.

    These actions are carried out by the heading of the account that is relevant to the circumstance.


  • Journal – The production of financial statements like the statement of profit and loss and the balance sheet does not in any way, shape, or form in any way, shape, or form at all include the journal in any manner, shape, or form in any way, shape, or form at all.
  • Ledger – Utilizing the sums from several different ledger accounts is one step in the process of getting ready to produce financial statements like the statement of profit and loss as well as the balance sheet.

    This step is part of the preparation phase. Creating the assertions themselves requires doing this as part of the process.

    This step is conducted to guarantee that there are no mistakes in the final financial statements that are generated.

Opening balance:

  • Journal – Because its primary function is to record the transactions that take place daily, a journal does not record any starting balance.

    Similarly, a diary does not keep track of any kind of beginning balance because its primary purpose is to record daily transactions.

    One reason is that the journal devotes its whole issue to discussing just this one subject throughout its entirety.
  • Ledger – This amount generates the beginning balance for ledger accounts defined by the amount in the account at the end of the fiscal year that immediately preceded the current fiscal year.

    The amount that was in a specific ledger account at the end of the fiscal year that came before it is used as the foundation for computing the starting balance for that ledger account. This ensures that the beginning balance is accurate.

Frequently Asked Questions (FAQs)

Q1. When it comes down to it, what is the most important reason for maintaining a journal?

A journal is a complete record of all of the transactions a corporation carries out during its operations.

Balancing accounts and moving information to various accounting records both make use of the information that is entered in a journal, which is then employed in those processes.

Q2. What information can you tell me about the contents of each page in the journal?

The word “double entry” refers to the practice of constantly documenting transactions by utilizing both a debit and a credit side.

This is what is indicated by the phrase “double entry.” The portion of the journal entry or account located to the left is the debit side, while the portion to the right is the credit side.

Q3. What parameters must be observed to be considered a contributor to the journal?

In contrast to other books of original entries, such as subsidiary books and cash books, the journal does not contribute to maintaining internal control.

This is because the journal is not a book of original entries. This is because the journal is the only place where transactions are recorded and organized in chronological order within the journal.

Q4. What are the benefits of keeping ledgers?

Keeping a ledger is necessary since it acts as a central record for all of your financial dealings and must thus be prepared.

Because it provides real-time reporting of income and costs, it might make it easier for you to keep track of your spending.

A trial balance may also be compiled using the general ledger, as can the identification of anomalous transactions and the creation of financial statements.

Q5. What are the several parts that, when placed together, result in forming a ledger?

General ledgers are a collection of related documents that record and summarize financial activities over a certain time period, including a chart of accounts, banking transactions, current accounts, and accounting periods.

Accountants often use the term “general ledger accounts” when referring to the accounts included in the chart of accounts. This is because the chart of accounts houses the accounts.

Similar Posts:

Was this article helpful?

Did you like this article? Why not share it:

Leave a Comment