Difference Between General Journal And General Ledger

Here we will study about the difference between General Journal And General Ledger. Previously we studied the Difference Between General Journal and Proper Journal.

A General Journal is simply a Journal in which those Business Transactions are recorded which takes place at a large number. So, a separate book is maintained to record such types of business transactions.

For Example A Cash Book is maintained to record Cash Transactions. Cash Receipts and Cash Payments are recorded. Since, these business transactions occur constantly and on regular basis. Similarly, Sales And Purchase Journal are maintained by the business to recorded sales and Purchase Transactions.

All these Transactions that are recorded in General Journal are posted to General Ledger. So, it is such a ledger in which all those business transaction that are recorded in General Journal are finally recorded in it.

For Example, Cash Book or Journal in which all cash transactions are recorded posted in this book as it is also considered as Ledger. All Sales Transaction are posted to Sales Ledger and all Purchase transactions are finally transferred to Purchase Ledger.

A General Journal is a Subsidiary Book while a General Ledger is a Final Books of Accounts where all business transactions from ledger are posted to separate books of accounts.

Journal is the book of original entry where all the Business transactions relating to any account are collectively recorded in chronological order while the Ledger is the king of accounts where different kinds of accounts are classified according to their nature so we can get the information of all transactions related to the particular account at one place.

A General Journal is a book of original entry while a General Ledger is a king of books of accounts as all transactions are finally transferred to general ledger separately in a summarized form.

A General Journal provides the totals of debit and credit sides of all the transactions while a general ledger provides totals of each accounts separately in a more meaningfully manner.

Similarities & Relationship Between Journal And Ledger

1. Both are important steps of Accounting and reported to internal management only unless it is required by law to show to external parties do i.e., in case of fraud cases, etc.

2. Journal is divided into Control Journal and Sub-Journal or Subsidiary Journal while Ledger is also divided into Control Ledger and Sub-Ledger or Subsidiary Ledger.

So, it is all about the difference between General Journal And General Ledger. Hopefully, now, you will be able to understand this topic in a good way.