Angelina Nayak
www.linkedin.com/in/nkang
JOURNALIZING
Angelina Nayak
www.linkedin.com/in/nkang
What is Journalizing?
Journalizing is the initial
recording of financial
transactions in chronological
order. It's the first step in the
accounting cycle.
Angelina Nayak
www.linkedin.com/in/nkang
Components
Date of the transaction
Account titles and
explanations
Debit or credit amounts
Reference number
(optional)
Angelina Nayak
www.linkedin.com/in/nkang
Rules of Debit and Credit
in Journalizing
Assets: Increased by debit, decreased by credit.
Liabilities: Increased by credit, decreased by
debit.
Equity: Increased by credit (for owner's
contributions and revenues), decreased by debit
(for withdrawals and expenses).
Revenue: Increased by credit, decreased by
debit.
Expenses: Increased by debit, decreased by
credit.
Angelina Nayak
www.linkedin.com/in/nkang
Journalizing Example 1
Transaction: Purchased office
supplies for cash of Rs. 5,000.
Journal Entry:
Debit: Office Supplies (Asset) Rs.
5,000
Credit: Cash (Asset) Rs. 5,000
Angelina Nayak
www.linkedin.com/in/nkang
Journalizing Example 2
Transaction: Provided services to a
customer on account for Rs. 8,000.
Journal Entry:
Debit: Accounts Receivable (Asset)
Rs. 8,000
Credit: Service Revenue (Revenue)
Rs. 8,000
Angelina Nayak
www.linkedin.com/in/nkang
Journalizing Example 3
Transaction: Paid rent for the month
of Rs. 3,000.
Journal Entry:
Debit: Rent Expense (Expense) Rs.
3,000
Credit: Cash (Asset) Rs. 3,000
Angelina Nayak
www.linkedin.com/in/nkang
Importance of Journalizing
Accurate and timely journalizing is
crucial for maintaining reliable
financial records.
It forms the basis for preparing
financial statements.
Angelina Nayak
www.linkedin.com/in/nkang
Tips for Effective Journalizing
Use clear and concise descriptions.
Ensure debits equal credits for each
entry.
Review journal entries for accuracy.
Angelina Nayak
www.linkedin.com/in/nkang
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Angelina Nayak