Journal
1. Is the book of prime entry.
2. As soon as transaction originates it is recorded in journal
3. Transactions are recorded in order of occurrence i.e. strictly in order of dates.
4. Narration (brief description) is written for each entry.
5. Ledger folio is written
6. Relevant information cannot be ascertained readily e.g. cash in hand can’t be found out easily.
7. Final accounts can’t be prepared directly from journal.
8. Accuracy of the books can’t be tested.
9. Debit and credit amounts of a transaction are recorded in adjacent columns.
10. Journal has two columns one for debit amount another for credit amount.
11. Journal is not balanced.
12. With the computerization of accounting journal may not be used for routine transactions like receipts, purchases, sales etc
Ledger
1. Is the book of final entry.
2. Transactions are posted in the ledger after the same have been recorded in the journal.
3. Transactions are classified according to the nature and are grouped in the concerned accounts.
4. Narration is not required.
5. Folio of the journal or sub-journal is written.
6. Since transactions of particular nature are grouped at one place therefore relevant information can be ascertained.
7. Ledger is the basis of preparing final accounts.
8. Accuracy of the books is tested by means of list of balances.
9. Debit and credit amounts of a transaction are recorded in two different sides of two different accounts.
10. Ledger has two sides: left side is debit side right side is credit side.
11. Every account in the ledger is balanced at appropriate time.
12. Ledger cannot be avoided. However it may be loose leaf ledger or a computerized ledger. But ledger is a must.