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CHAPTER             Journal
                      CHAPTER

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                                  MEANING OF KEY TERMS USED IN THE CHAPTER

                       1.  Journal           It is the primary book of account in which transactions are first recorded in
                                             a chronological order, i.e., in the order they are entered into.
                       2.  Book of Original Entry  It is the book in which a transaction is first recorded, i.e., Journal book.
                       3.  Bad Debts         It is the amount which is not recoverable and hence, written off.
                       4.  Bad Debts         It is the amount which was earlier written off as Bad Debt and is later
                         Recovered           recovered, in full or in part.
                       5.  Discount
                         •  Trade Discount   It is a discount allowed to the purchaser of goods when goods are
                                             purchased in large quantity.
                         •  Cash Discount    It is a discount allowed on receipt of amount promptly,  i.e., within the
                                             agreed time.
                         •  Rebate           Rebate is the discount allowed for reasons other than those for which trade
                                             discount and cash discount are allowed. For example, rebate allowed for poor
                                             quality of goods, goods being not as per specification, etc.
                       6.  Simple Journal    It is a Journal entry in which one account is debited and another account
                          Entry              is credited.
                       7.  Compound Journal   It is a Journal entry in which one or more accounts are debited and/or
                         Entry               credited.
                       8.  Opening Entry     It is the first entry passed in the Journal book incorporating the closing
                                             balances of previous year.
                       9.  Goods and Services   Goods and Services Tax (GST) is a comprehensive indirect tax charged
                         Tax (GST)           each time the supply is made, i.e., each time the goods are sold and/or
                                             services are rendered, except on the exempt goods and services.


                                                  CHAPTER SUMMARY

                     •  Journal  is  the  primary  book  of  account  in  which  transactions  are  first  recorded  in  a
                       chronological (day-to-day) order.
                     •  Journal is a book of original entry because a transaction is first entered in the Journal from
                       where it is posted to the Ledger.
                     •  Journal entry may be (i) Simple Journal Entry; or (ii) Compound Journal Entry.
                        (i)  Simple Journal Entry is a Journal entry in which one account is debited and another
                           account is credited.
                       (ii)  Compound Journal Entry is a Journal entry, which involves more than two accounts.
                           It means it is an entry in which one or more than one accounts are debited
                           and/or credited.
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