Journalising Or Journal Entry
Journalizing is the second phase of accounting cycle. Recording of a transaction in Journal is called Journalising or Journal Entry.
This activity only applies to the double-entry bookkeeping system
Steps of Jornalizing
- Analysis of each business transaction to determine the nature of the transaction.
- Determine which accounts will be affected.
- Prepare a journal entry.
For instance Cargo, Inc. bought a new Truck for Rs. 1,00,000 cash on 1st March ,2019.
First, the transaction must be analyzed to identify what accounts were affected. Cargo, Inc. bought a new Truck, so the Truck account would have been affected and it paid cash , so the cash account would also have been affected.
Second, we must analyze how these accounts changed. The Truck account increased because we just added another Truck to it and the cash account decreased because we just paid cash for the Truck.
Third, we must record the transaction.
March 1st
Truck Account Dr. 1,00,000
Cash Account Cr. 1,00,000