Definition

An accounting record where all business transactions are originally entered. A journal details which transactions occurred and what accounts were affected. Journal entries are usually recorded in chronological order, and using the doubleentry method of bookkeeping.

Definition: Journal Short Definition: A journal details all the financial transactions of a business and which accounts these transactions affect. All business transaction are initially recorded in a journal using the double-entry method or single-entry method of bookkeeping. Typically, journal entries are entered in chronological order and debits are entered before credits. Longer Explanation of an Accounting Journal In accounting, a "journal" refers to a financial record kept in the form of a book, spreadsheet, or accounting software that contains all the recorded financial transaction information about a business. Before computers, an accounting journal was a physical log book with multiple columns to record financial transactions for a company. Today, most businesses use soft type of financial accounting software to record and manage their business transactions. These transactions are then assigned to a specific ledger class using a Chart of Accounts number to prepare profit and loss statements, financial statements, and other important financial reports. Each listed transaction is referred to as a journal entry. Information from the journal is then recorded in ledgers.
What is a journal entry in Accounting? Journal entry is an entry to the journal. Journal is a record that keeps accounting transactions in chronological order, i.e. as they occur. Ledger is a record that keeps accounting transactions by accounts. Account is a unit to record and summarize accounting transactions. All accounting transactions are recorded through journal entries that show account names, amounts, and whether those accounts are recorded in debit or credit side of accounts.

Double-Entry Recording of Accounting Transactions To record transactions, accounting system uses double-entry accounting. Double-entry implies that transactions are always recorded using two sides, debit and credit. Debit refers to the left-hand side and credit refers to the right-hand side of the journal entry or account. The sum of debit side amounts should equal to the sum of credit side amounts. A journal entry is called "balanced" when the sum of debit side amounts equals to the sum of credit side amounts.

T-Account This form looks like a letter "T", so it is called a T-account. T-account is a convenient form to analyze accounts, because it shows both debit and credit sides of the account. Account Debit Credit

Examples of Journal Entries Transaction 1: Company A sold its products at $120 and received the full amount in cash. Steps 1 2 Self-Questions What did Company A receive? If Company A received cash, how would this affect the cash balance? Cash. Receiving cash increases the cash balance of the company. Debit side (Left side). Sales. Credit side (Right side). Yes. $120 = $120 Answers

3 4 5 6

Which side of cash account represents the increase in cash? What is the account name to record the sales of products. Which side of sales account represents the increase in sales? Does the sum of debit side amounts equal to the sum of credit side amounts? In other words, does this journal entry balance?

[Journal entry to record transaction 1]

Debit Cash Sales 120

Credit

120

The 3 golden rules of accounting are as follows 1:debit the reciver and credit the giver, 2:debit what comes in and credit what goes out and 3:debit all expense and loss and credit all income and gains.