Difference Between Journal and Ledger


Main Difference

The main difference between Journal and Ledger is that the Journal is a subsidiary day book, where monetary transactions are recorded for the first time, whenever they arise, and Ledger is a principal book which comprises a set of accounts, where the transactions transferred from the Journal.

Journal vs. Ledger

Journal called the original book of entry due to the transaction is recorded first in the journal. Ledger, conversely, is called the second book of entry because the transaction in the ledger transferred from journal to ledger. In a journal, the entry is recorded in sequence, meaning the entry recorded as per the happenstance of the transaction. In the ledger, the entry recorded account wisely. The action of recording into the journal is called journaling. The action of recording within the ledger is called posting. In a journal, the narration is essential because if not, the entry would lose its value. In the ledger, the narration is voluntary. In a journal, there is no need for balancing. In the ledger, balancing is a must at the end of the period.


Comparison chart

The book in which all the transactions recorded, as and when they arise is known as Journal.The book which permits to transfer all the transactions into separate accounts is known as Ledger.
Chronological recordAnalytical record
What is it?
It is a subsidiary book.It is a principal book.
Need not to be balanced.Must be balanced.
The process of recording transactions into Journal known as Journalizing.The process of transferring entries from the journal to ledger known as Posting.
MustNot necessary.
Also known as
Book of original entry.Book of the second entry.
Debit and Credit

What is Journal?

A journal is a throughout account that records all the financial transactions of a business, to be applied for future reconciling of and transfer to other official accounting records, such as the general ledger. A journal state the date of a transaction, which accounts were affected, and the amounts, usually in a double-entry bookkeeping method. For accounting intention, a journal is a physical record or digital document retained as a book, spreadsheet or data within the accounting software. When a business transaction made, a bookkeeper enters the financial transaction as a journal entry. If the expense or income influences one or more business accounts, the journal entry will describe that as well. Journaling is a fundamental part of objective record-keeping and allows for brief review and records-transfer later in the accounting process. Journals often reviewed as part of a trade or audit process


Single-entry bookkeeping rarely used in accounting and business. It is the most primary form of accounting and is set up like a checkbook, in that there is just a single account used for each journal entry. It is a basic running total of cash input and cash outflow. Double-entry bookkeeping is the most general form of accounting. It directly affects the way journals kept and journal entries recorded. Every business transaction is composed of an exchange between two accounts. This means that each journal entry recorded with two columns.

What is Ledger?

A ledger represents the record-keeping system for a company’s financial data with debit and credit account records validated by a trial balance. The ledger provides a record of each financial transaction that takes place during the life of an operating company. The ledger retains account information that is needed to prepare the company’s financial statements, and transaction data is segregated by type into accounts for assets, liabilities, owners’ equity, revenues, and expenses. A ledger is the foundation of a system used by accountants to store and organize financial data used to create the firm’s financial statements. Transactions are placed to individual sub-ledger accounts, as defined by the company’s chart of accounts. The transactions are then locked or closed out or summarized to the ledger, and the accountant creates a trial balance, which helps as a report of every ledger account’s balance. The trial balance is verified for errors and amended by posting additional necessary entries, and then the adjusted trial balance is used to generate the financial statements.

The transaction details contained in the ledger are compiled and summarized at various levels to make a trial balance, income statement, balance sheet, statement of cash flows, and many other financial reports. This assists accountants, company management, analysts, investors, and other stakeholders evaluate the company’s performance on an ongoing basis. When expenses impale in a given period, or a company records other transactions that affect its revenues, net income, or other key financial metrics, the financial statement data often doesn’t tell the whole story.

Key Differences

  1. The Journal is a record or book where all the financial transactions recorded for the first time. When the transactions entered in the journal, then they are posted into individual accounts known as Ledger.
  2. The Journal termed as the book of original entry, but Ledger is a book of the second entry.
  3. In the journal, the transactions recorded sequentially. While, in the ledger, the transactions are recorded based on accounts.
  4. The Journal is a secondary book, whereas Ledger is a principal book.
  5. In the journal, transactions are recorded in chronological order, whereas in the ledger, transactions recorded in analytical order.
  6. Debit and Credit are columned in the journal, but in the ledger, they are two opposite sides.
  7. Ledger accounts must be balanced, but the journal need not be balanced.
  8. In the journal, chronicle must be written to support the entry. While in the ledger, there is no requirement of chronicle.


Although, if we compare, we would see that journal is more important than ledger; because if there is a mistake in the journal, it would be very difficult to figure out since it is the book of original entry. Ledger is also essential because it is the source of all other financial statements.