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Financial & Managerial Accounting
Found in: Page 79
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

Should a transaction be recorded first in a journal or the ledger? Why?

A transaction should be first recorded into the journal.

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Step by Step Solution

Journal and ledger

Journal is the book of original entry. Under this book, the transactions are recorded chronologically.

Ledger is the collection of similar business transactions into one place.

Journal or ledger which comes first?

All the entries are first recorded into a journal and then posted on the ledger. The reason for this is that there must be a daily quick record for each business event. Each business event must be reported into the books chronologically as soon as they happen.

So there is a separate book for this purpose called a general journal. All the transactions are recorded without any classification or segregation. This also becomes a basis for locating source transactions for the further accounting process.

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