Steps in Journalising

The process of analysing the business transactions under the heads of debit and credit and recording them in the Journal is called Journalising. An entry made in the journal is called a ‘Journal Entry’.

Step 1  →  Determine the two accounts which are involved in the transaction.

Step 2  →  Classify the above two accounts under Personal, Real or Nominal.

Step 3  →   Find out the rules of debit and credit for the above two accounts.

Step 4  →     Identify which account is to be debited and which account is to be credited.

Step 5  →    Record the date of transaction in the date column. The year and month is written once, till they change. The sequence of the dates and months should be strictly maintained.

Step 6    →  Enter the name of the account to be debited in the particulars column very close to the left hand side of the particulars column followed by the abbreviation Dr. in the same line. Against this, the amount to be debited is written in the debit amount column in the same line.

Step 7  →    Write the name of the account to be credited in the second line starts with the word ‘To’ a few space away from the margin in the particulars column. Against this, the amount to be credited is written in the credit amount column in the same line.

Step 8 →     Write the narration within brackets in the next line in the particulars column.

Step 9 → Draw a line across the entire particulars column to seperate one journal entry from the other.