Page 26 - DMGT403_ACCOUNTING_FOR_MANAGERS

Unit 2: Recording of Transactions

2.5 Journalizing Transactions Notes

The practice starts with the journalizing of entries. After journalisation, the entries passed in the
journal will be passed into the ledger A/c. The immediate next stage is to prepare the trial
balance.

Did u know? What is meant by the journal entry?
It is an entry systematically recorded to the tune of golden rules of accounting in the
journal book is known as journal entries.
The journal entries are recorded in the sequential order. The order of recording is conventionally
done on the basis of date. The journal entry usually contains two different parts, which are
nothing but two different accounts affecting the transactions.
Date Particulars Ledger Folio Debit Credit
( ) ( )
Number of the day in To debit the name of the account Page number in
the month, Name of the the respective
To credit the name of the account
month and Year in full ledger

Journalising the entries is different from one transaction to another. The difference is only due
to nature and characteristics of the transactions. To journalise as easy as possible, the systematic
approach to be adopted to post the transactions without any ambiguity.

Notes Journalising can be generally categorized into following various categories:
1. Taking place within the same natured accounts.
2. Taking part in between accounts of two different in categories.

First, we will discuss the journalizing of entries of the same natured accounts. This can be
classified into various segments:

1. Transactions only in between the personal accounts
2. Transactions only in between the real accounts
Under the category of transactions which affect only the personal accounts are as follows:

1. Between the persons of the nature
2. Between the persons of the artificial relationship
3. Between the persons of representations

!

Caution The points to be observed at the moment of journalizing:
1. The nature of the accounts to be identified
2. The accounts to be correlated to the golden rules
3. The entry to be passed through proper debiting and crediting of the accounts
respectively.

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