Question

Please briefly explain us:

1) the difference between the journal and the ledger, and

2) when accounts should be debited, and when they should be credited.

Answer 1

Answer-
1)The difference between journal and ledger are as follows:-
a)The Journal is the first step of accounting where daily records of business transactions are first recorded in a chronological order, i.e, in the order of dates,whereas a ledger is an accounting which is prepared just after recording a journal entry.
b)It is known as the primary book of accounting or the book of original entry whereas a ledger is the principal book of accounting or the book of final entry.
c)The process of recording a journal is known as journalizing which is performed in the form of a journal entry whereas the recording in a ledger is known as posting.
d)Journal may be divided into purchases day book,purchases return book etc,whereas ledger may be divided as sales ledger/debtors ledger ,creditors/purhases ledger etc.

2)Accounts are debited when there is an increase in assest or expense account or decrease in liability or equity account,it is recorded in left side or debit column.Whereas the credit is done when there is increase in liabilty or equity account or decreases an assest or expense account ,It is recorded in right side or credit column.
The golden rules of accounting are:-
a)Debit the receiver and credit the giver
b)Debit what comes in and credit what goes out.
c)Debit expenses and losses,credit income and gains.