Notes on Journalizing Business Transactions

Definition of Journalizing

• Journalizing: Chronological recording of business transactions in a general journal.

• General Journal: Daily record showing complete debit and credit effects of transactions in one place.

• Also called the book of original entries.

General Journal Format

• Date: Shows the transaction date.

• Account Titles and Explanations: Lists affected account titles and provides justification for debits/credits.

• P/R (Posting Reference): Indicates ledger account numbers for debits/credits.

• Debit and Credit: Amounts to be debited or credited.

Journal Rules

1. Analyze transactions from business source documents (receipts, vouchers).

2. Record the transaction date in the Date column.

3. State affected account titles; debited accounts first, credited accounts indented.

4. Provide a brief explanation below the last credited account to justify debits/credits.

5. Leave a blank line after each entry to distinguish entries.

   • Each journal entry consists of: Transaction Date, Debit entry, Credit entry, and Explanation.