1. ACCOUNTING RECORDS
JOURNAL

2. Steps in the Accounting Cycle
1. Collect and
analyze info
7. Close the
accounts
2. Journalize
transactions
6. Record and
post adjusting
entries
3. Post
transactions to
general ledger
5. Prepare
financial
statements
4. Prepare
work sheet
LO6

3. Journalize transactions
Journal: mean a day book or daily record. the transactions are first recorded in chronological order (as and when they take place).
It is a book of prime, original or first entry.
Journal is helpful in the preparation of accounts in the ledger

4. Format of Journal
The process of recording transactions in journal is termed as “Journalizing”.
The General Journal [ Journal ] identifies which accounts are going to be debited and which accounts are going to be credited and creates a complete record of this information.

5. Source documents
Business need to have a proof of transactions that occur.
Every business transaction is initially recorded on a Source document
A S.D is a point of original entry of a transaction & should provide the information necessary to record the transaction accurately.

6. There are 3 rules for recording the transactions
Personal Accounts
Debit The Receiver
Credit The Giver
Real Accounts
Debit What comes in
Credit What goes out
Nominal Accounts
Debit Expenses and losses
Credit Income and gains

7. POINTS TO BE NOTED WHILE PASSING JOURNAL ENTRIES
The various accounts are classified into 5 categories:
1) Assets Account
2) Liabilities Accounts
3) Capital Accounts
4) Expenses and losses Accounts
5) Income and Gains Accounts

8. COMPOUND ENTRY
When ever two or more transactions of the same nature (i.e. transactions where either the account to be debited or the account to be credited is common) take place on the same date a composite or compound or combined journal entry may be passed for them instead of passing separate journal entry for cash of them.

9. Illustration
Let us Journalize the transactions: