Unit-5 Journal

This unit explains the method of applying the rules of debit and credit to business transactions and how exactly the entries are made.

What is journal entries?

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Learning Pundits Content Team

Written on Apr 17, 2019 5:52:24 PM

In manual accounting or bookkeeping systems, business transactions are first recorded in a journal, hence the term journal entry.

Journal entries that are recorded in a company's general journal will consist of the following:

  • The appropriate date
  • The account(s) and amount(s) that will be debited
  • The account(s) and amount(s) that will be credited
  • A short description/memo/reference

The journal entries appear in a journal in order by date and are then posted to the appropriate accounts in the general ledger.

Computerized accounting systems will automatically record most of the business transactions into the general ledger accounts immediately after the software prepares the sales invoices, issues checks to creditors, processes receipts from customers, etc. Hence, we will not write journal entries for most of the business transactions

The journal is provided with five columns. Each of these columns is meant for recording a specific detaof the transaction.

Column (1) is used for recording the date of the transaction i.e., the date on which the transaction has occurred.

It is customary to write the year at the top of the column. In the next line, the month is written below the year and the date of the transaction is entered immediately after the month as follows.

  •                       (Year)                                                                     1987
  •                       (Month, date)                                                         Jan., 1 

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