Steps Required for Journalising:
For journalising a transaction i.e., for passing an entry for a transaction in the journal, the following steps are required to be taken:
1. As stated earlier, every business transaction involves two accounts. One of the, the accounts receives the benefit of the transaction, and the other account gives the benefit of the transaction. As such, for journalising a transaction, first, we should ascertain the two accounts involved in the transaction.
{It may be noted that, while ascertaining the two accounts involved in a business transaction, the account of the firm (in whose books the transaction is recorded) should not be taken into account, as the entry is passed in the books of that firm. Only the accounts of the other persons with whom the firm deals, the accounts of assets or things that come into and go out of the business, and the accounts of the expenses incurred or the incomes earned by the firm should be considered.}
2. Secondly, after ascertaining the two accounts involved in a transaction, we should find out to which classes of accounts these two accounts belong.
3. Thirdly, we should apply the corresponding or relevant rules for debit and credit (i.e., the rules for debit and credit applicable to the respective accounts) and find out which account is to be debited and which account is to be credited.
4. Finally, after ascertaining the account to be debited and the account to be credited, the entry should be passed in the journal, debiting the account to be debited and crediting the account to be credited.
For journalising a transaction i.e., for passing an entry for a transaction in the journal, the following steps are required to be taken:
1. As stated earlier, every business transaction involves two accounts. One of the, the accounts receives the benefit of the transaction, and the other account gives the benefit of the transaction. As such, for journalising a transaction, first, we should ascertain the two accounts involved in the transaction.
{It may be noted that, while ascertaining the two accounts involved in a business transaction, the account of the firm (in whose books the transaction is recorded) should not be taken into account, as the entry is passed in the books of that firm. Only the accounts of the other persons with whom the firm deals, the accounts of assets or things that come into and go out of the business, and the accounts of the expenses incurred or the incomes earned by the firm should be considered.}
2. Secondly, after ascertaining the two accounts involved in a transaction, we should find out to which classes of accounts these two accounts belong.
3. Thirdly, we should apply the corresponding or relevant rules for debit and credit (i.e., the rules for debit and credit applicable to the respective accounts) and find out which account is to be debited and which account is to be credited.
4. Finally, after ascertaining the account to be debited and the account to be credited, the entry should be passed in the journal, debiting the account to be debited and crediting the account to be credited.
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