Difference Between Journal and Ledger

Edited by Diffzy | Updated on: April 30, 2023


Difference Between Journal and Ledger

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Journal and ledger are two keywords frequently used while studying financial accounting concepts or preparing financial accounts. Ledgers and journals play a significant function in the double-entry accounting system. All transactions must be gone through in each of these books before final accounting can be prepared.

So, in today’s article, let’s look at the differences between a Journal and a Ledger.

A journal can be used as a diary in which you write about your day or as a supplementary journal in which transactions are documented. A ledger is a book that keeps track of financial transactions over time. A ledger is a book where financial transactions are sorted and documented. Financial accounting includes both the journal and the ledger.

It becomes important for the accounts and finance students to understand the deep concept of making a journal and making a ledger. It will help them in their studies and in achieving their academic goals.

Journal vs Ledger

The primary distinction between a journal and a ledger is that a journal acts as a temporary book for transactions, with transactions first being recorded in the journal and then being permanently recorded in the ledger. After evaluating the journal, the financial statements are recorded in a ledger.

A journal is the prime entry book, which means that anytime a transaction occurs, it must be documented in the journal as quickly as possible. Then, a journal entry is a type of entry. According to experts, journalizing is the process of recording in a journal. The journal entry specifies which accounts should be debited and credited, as well as a narrative explaining why the relevant entry was made. General journals, buy journals, sales journals, and other forms of journals are some of the most common. A transaction must be recorded in one of the special journals or the general journal. The data in the journal is organized in a chronological sequence of occurrences.

A ledger is a final-entry accounting book in which transactions are recorded in distinct accounts. There exist numerous accounts in the ledger (normally known as T- accounts). So, the transactions that are recorded in the journals are grouped and turned into the correct accounts in the ledger. Then, Posting is the term for the process of recording data. The Financial statements (also known as final accounts) are frequently produced from the ledgers, such as the statement of comprehensive income (income statement) and the statement of financial position (balance sheet). The accuracy of ledger accounts can be tested by adding all the debit balances in the ledger at any given date or time to the sum of all the credit balances in the ledger (Difference Between Journal and Ledger, 2011).

Difference Between Journal and Ledger in Tabular Form

Parameters of Comparison Journal Ledger
The Definition Transactions are recorded in a supplemental book. A journal transaction is examined and then entered into a ledger. A ledger is a book that keeps track of financial transactions over time.
The naming Journalizing is the process of recording transactions in a journal. Posting is the process of recording transactions in a ledger.
The income statement A diary cannot be used to create an income statement. To determine revenues and losses, income statements are created from ledgers.
The balance sheet A balance sheet cannot be created from a journal. Balance sheets are prepared from a ledger.
The opening balance There is no opening balance in journals. Ledgers have the option of the opening balance (Difference Between Journal and Ledger (With Table), n.d.).

What is a Journal?

A journal, also known as a primary entry book, is a book that keeps track of transactions in chronological order. Ledger, or principal book, on the other hand, refers to a series of accounts in which similar transactions involving a person, asset, revenue, obligation, or expense are tracked. 

The Journal is a separate day journal where monetary transactions are first documented as they occur. The transactions are organized and documented in this way so that they can be referred to in the future. It draws attention to the two accounts that are impacted by the transaction, one of which is debited and the other credited with the same amount.

The journal is called the subsidiary book because the accounting permanent book–ledger may be made easily and correctly if transactions are entered in the journal, according to debit and credit separately in the journal. According to some thinkers, a journal is a book that keeps track of the events of each day. The journal is also a primary book that keeps track of transactions in a chronological and organized manner.

From the foregoing, it can be concluded that a journal is a book of accounts in which the debit and credit accounts of transactions that occur in an organization are first written in chronological order of dates with a brief explanation after determining the debit and credit accounts.

The first step in the accounting process is to keep a diary of transactions, often known as journalizing. The following elements of the journal are highlighted based on the definitions and recording procedures:

  • A book containing primary entry- The keeping of a journal is the first step in the accounting process. The journal is where transactions are first documented. The diary is known as the "basic book of accounts" for this reason.
  • The daily record book- Transactions are documented in the journal in chronological sequence of dates shortly after they occur and are identified. A daily record book is so named because transactions are documented in the diary on the day they occur.
  • The chronological order- In a diary, daily transactions are documented in chronological order of dates. The journal is sometimes known as a chronological book of accounts because of this.
  • The usage of dual aspects of transactions- Every transaction is documented in a journal in dual aspects, i.e., debiting one account and crediting the other account, according to the principles of the double-entry system.
  • Usage of explanation- Every transaction in the journal is followed with an explanation or narration because explanations of entries are useful for future reference.
  • The different columns- The date, account titles and explanations, ledger folio, debit money column, and credit money column are all organized into five columns on each page of the diary.
  • The equal amount of money- The same amount of money is recorded in the debit money and credit money sections for each transaction's journal entry.
  • The subsidiary book- Journalizing transactions makes it easier to prepare the ledger. The journal is referred to as a secondary book to the ledger for this reason.
  • Usage of several journal books- The term "journal" refers to any type of publication. However, due to the size and number of transactions, journals are split into several categories. Purchase journals, sales journals, purchase returns journals, sales returns journals, cash receipt journals, cash disbursement journals, and journal proper are only a few examples. The journal's purposes are established by the organization's requirements.

Advantages of Journal

  • Now, the journal, which acts as the fundamental book for recording transactions, contains detailed descriptions of transactions.
  • It's also the day-to-day ledger of transactions.
  • It is even simple to obtain relevant information from several subsidiary journals.
  • It is the division of recounting work among staff according to their productivity.
  • It also aids in the reduction of errors.
  • As the number of subsidiary journals grows, they shrink in size and become easier to manage.
  • The potential of transaction omission – recording is eliminated.
  • It will also refer to in the future.
  • The ledger can be kept simple and orderly.
  • It even aids in the correction of errors (What is Accounting Journal? Definition and Meaning, n.d.).

As known by experts, accounts are separated into five types according to accounting principles.

Income accounts, expenditure accounts, asset accounts, liability accounts, and capital accounts are only a few examples.

These five categories should be used to classify debit and credit transactions. Accounts are debited and credited after classification, and transactions are journalized according to set procedures.

What is Ledger?

A ledger is a book or collection of accounts that keep track of account transactions. Each account has a starting or carry-forward balance, and each transaction would be recorded as a debit or credit in its column, as well as the account's ending or closing balance. The ledger is a permanent record of all amounts entered in supporting journals, which are chronologically organized and list specific transactions. Each transaction is routed through a journal and into one or more ledgers. The financial statements of a corporation are derived from the ledgers' summary totals.

Ledgers include the following:

  • Accounts receivable are recorded in the sales ledger. Customers' financial transactions with the company are recorded in this ledger.
  • The purchase ledger keeps track of the money spent by the company on purchases.
  • Assets, liabilities, income, costs, and capital are the five main account types represented in the general ledger.

Every debit in a ledger must be matched by a credit, ensuring that the debits and credits in the grand totals are equivalent.

Types of Ledgers

The general, debtors and creditors ledgers are the three categories of ledgers.  The general ledger is where information from journals is gathered. All journals are tallied and posted to General Ledger once a month. The General Ledger's job is to organize and summarise all individual transactions that appear in the journals. The Debtors Ledger is where information from the sales journal is collected. The Debtors Ledger's goal is to keep track of which customers owe money to the company and how much they owe. The Creditors Ledger is where information from the Purchases Journal is collected. The Creditors Ledger's goal is to keep track of which suppliers the company owes money to and how much they owe (Ledger, n.d.).

Main Differences Between Journal and Ledger In Points

The main differences between a journal and a ledger are as follows:

  • The journal is the prime (first) entry book, whereas the ledger is the last entry book.
  • In other words, ledger records are analytical, whereas journal records are chronological.
  • In a diary, the narration is essential; however, this is not the case in a ledger.
  • In a journal, transactions are documented in the order in which they occur, but in the ledger, transactions are categorized and recorded in applicable accounts.
  • Data is classified based on ledger transactions, but the cornerstone for data classification is ledger accounts.
  •  After a transaction occurs, it is first recorded in the journal, and then it is transferred to the ledger.
  • The Final accounts cannot be prepared straight from the journal; however, ledgers provide the foundation for quick final account production.
  • While the accuracy of the journal cannot be confirmed, the accuracy of the ledger can be tested to a degree using a trial balance.
  • A ledger has two sides of an account, one for debit and the other for credit, whereas a journal has two columns for debit and credit.
  • Journals are not balanced after each period, but ledger accounts are balanced at the end of each period (Difference Between Journal and Ledger, 2011).


To conclude, thus we can say that, a student should prefer to study things in a very detailed manner. By doing this, people get to learn a lot, and also, they get an experience of how things work in real life. Hence, not just while reading about a journal and a ledger, but while reading any other topic as well, one should try his/her level best to go into the depths of that particular topic. When reading about a journal and a ledger, it becomes vital to go through their advantages, different roles, and functions. It also becomes helpful to commerce students as well in their regular academics. This makes them excel at their basics and flaunt their skills in front of the people.


  • Ledger. (n.d.). Retrieved from WIKIPEDIA: https://en.wikipedia.org/wiki/Ledger
  • What is Accounting Journal? Definition and Meaning. (n.d.). Retrieved from https://www.iedunote.com/what-is-accounting-journal#:~:text=Definition%20and%20Meaning%201%20Features%20of%20Accounting%20Journal.,of%20accounting%20accounts%20are%20divided%20into%205%20groups.


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"Difference Between Journal and Ledger." Diffzy.com, 2024. Fri. 23 Feb. 2024. <https://www.diffzy.com/article/difference-between-journal-and-ledger-479>.

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