ACCOUNTING CYCLE
The General Journal and Its Function
- A Journal is the first recording of the business transaction
- The function of a journal is to provide a permanent and complete record, arranged in chronological order for future reference, of all the business transactions of a firm
- The manner of entering transaction in the journal displays their effects on the accounts of the firm
- The process of recording a transaction in the journal is called journalizing
- This form of recording a transaction is called a journal entry
The Procedures of Journalizing a transaction
- Every page of the journal is numbered for future reference
- The year is entered at the head of the date column
- The date of the business transaction is entered in the date column. The name of the month need not be repeated for successive transactions during that month
- The name of the account to be debited is entered against the left margin of the description column
- The amount to be debited is entered in the debit amount column
- The name of the account to be credited is entered on the line following the debit account entry. An indentation is made to indicate that the account is credited
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