Note on Journal Proper

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Concept and Meaning of Journal Proper

Journal proper is one of the important journals or subsidiary books. It is a subsidiary book in which not all but only a few types of transactions are recorded. There are certain types of transactions which are not recorded in other subsidiary books but are recorded in the journal proper. These transactions, for example, include the transactions relating to drawings, outstanding expenses, accrued incomes, reserves, provisions, interest on capital, drawing of goods and assets by proprietor, loss of goods by some reasons, and credit purchase and sale of other assets such as land, buildings, machinery and furniture.

In a journal proper book, the transactions are recorded by passing journal entries based on the rules of debit and credit. Formally, thus, the journal paper may be defined as a journal or subsidiary book in which not all but only a few types of financial transactions of the business are recorded systematically in a chronological order as and when they take place.

Types of Entries made in Journal Proper

The following are the important entries which are made in the journal proper.

  • Opening Entries

All the assets and liabilities of the previous year are required to be carried forward to current year by passing entries. Such entries are called opening entries and passed through the journal proper. The assets are debited and liabilities are credited while passing opening entries. The excess of assets over liabilities is credited to capital account.

  • Closing Entries

The entries prepared for closing different ledger accounts in the process of preparing final account at the end of the year are called closing entries. Such entries are needed to transfer the expenses and incomes related with revenue nature to trading and profit and loss account. All those transactions are recorded in journal proper.

  • Transfer Entries

The transfer of amount from one account to another account is made through journal proper. Transfer of gross profit and net profit or loss are required at the time of final accounts preparation. Besides such transfers, the settlement of accounts is also needed. Such transfer of an amount from one account to another account are made by passing entries in the journal proper.

  • Adjustment Entries

Incomes and expenses may occur after closing the ledger accounts at the end of accounting year. They appear in the form of adjustments. Such incomes and expenses should be adjusted either in a trading account or profit and loss account or balance sheet. The entries passed for necessary adjustments are called adjustment entries. If those incomes and expenditures are not incorporated, the trading and profit and loss account can not give the true and fair result of an operation. Hence, those items of incomes and expenses should be adjusted before preparing a final account for a particular period. Since, they affect profit or loss, assets and liabilities of a business entity as a whole.


Meaning of Adjusted Trial Balance

An adjusted trial balance is a listing of all company accounts that will appear on the financial statements after year-end adjusting journal entries have been made. Generally, the adjustment is given outside the unadjusted trial balance which is adjusted in a trading account or profit & loss account or in the balance sheet. If the given adjustment are adjusted in trial balance, then such trial balance is said to be adjusted trial balance.

In other words, the trial balance which is prepared after including the adjustment entries is said to adjusted trial balance.

Format for Adjusted Trial Balance

Adjusted trial Balance for the year ended..........

A/C No.


Unadjusted Trial Balance


Adjusted Trial Balance





















Sharma, Narendra, Principles of Accounting-XI, Bundipuran Prakashan, Kathmandu

Koirala, Yadav Raj, Principles of Accounting-XI, Asmita Books Publication, Kathmandu

Shrestha, Dasharaha, Accountancy-XI, M.K. Prakashan, Kathmandu

Types of entries made in journal proper

  1. Opening Entries
  2. Closing Entries
  3. Transfer Entries
  4. Adjustment Entries



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