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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.

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What are the steps to be followed in journalizing the business transaction? 


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Learning Pundits Content Team

Written on Apr 17, 2019 6:04:44 PM

The following steps shall help you to do such analysis.

1)Take up the transaction, one by one. Read and analyze the transaction carefully from the business entity point of view, and identify the two accounts that are being affected by the transaction.

2)You are aware that accounts have been classified as personal, real and nominal accounts. Hence, after identifying the two accounts that are affected by the transaction, you must determine, in respect of each account, whether it is a personal account or a real account or a nominal account.

3)Each class of account has its own rule of debit and credit, which you have already learnt in the previous unit. Now, apply the relevant rules and decide which account is to be debited and which is to be credited.