When a business transaction takes place, the first record of it is done in a book called journal. The journal records all the transactions of a business in the order in which they occur. The journal may, therefore, be defined as a chronological record of accounting transactions. It shows names of accounts that are to be debited or credited, the amounts of the debits and credits and any other additional but useful information about the transaction. A journal does not replace but precedes the ledger.
Thus, the transactions are recorded first in the journal, and then they are posted to the ledger. Hence, the journal is called the book of original or prime entry and the ledger is the book of the second entry. While the journal records transactions in chronological order, the ledger records transactions in an analytical order.