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ACCOUNTING: JOURNALIZING

THE ART OF JOURNALIZING

Journalizing a transaction is recording it in chronological order in a general journal, a book where all economic events are recorded. Remember that a transaction will affect at minimum two different accounts and that each entry or record of transaction must have an account that is debited and an account that is credited and the debit side must equal the credit side.

A STEP BY STEP PROCESS

STEP 1. Find the accounts affected. There must be at least 2 accounts.

STEP 2. Identify their respective category or classification: Assets, Liabilities, OE, and OE subcategories: Revenue, Expenses 

STEP 3. Determine if the accounts increase or decrease 

STEP 4. Apply the debit credit rule 

  • Increase in Assets and Expense (normal balance) = Debit 
  • Increase in Liability and Revenue (normal balance) = Credit 
  • Decrease in Assets and Expense increase (opposite of normal balance) = Credit 
  • Decrease in Liability and Revenue (opposite of normal balance) = Debit 

STEP 5. Make sure the debit side equals the credit side 

Navigate to this site to see journal examples. http://www.accountingverse.com/accounting-basics/journal-entry-examples.html

VIDEO

Here is a great video on how to journalize transactions using the double entry accounting method.