3.8 Recording Transactions in a Journal

Recording transactions in a journal is called entering or journalising, and each transaction recorded is a separate journal entry.A journal entry involving more than two accounts is called a compound journal entry.

The principles of double-entry accounting are observed for each transaction 

 The process for journalising transactions:

1. The date of each transaction is entered in the date column.

2. The name of the account(s) to be debited is entered against the left margin of the particulars column.

3. The amount to be debited to each account is entered in the debit amount column on the same line as the account name.

4. The name of the account(s) to be credited is entered on the line immediately below the account(s) to be debited and is indented to distinguish the account(s) credited from the account(s) debited.

5. The amount to be credited to each account is entered in the credit amount column on the same line as the account name.

6. A brief explanation of the transaction is entered.

7. A single line is usually left blank between each journal entry.

8. The posting reference column is left blank until the account is posted to the ledger (see below).