What is Journalising?

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We know what is the concept of journal? and types of Journals.In this chapter of Accounting Basics,Lets Under stand What is Journalising.

What is Journalising?

The Procedure of Recording Transactions in the journal is called Journalising. Before a transaction is recorded in the journal, it is essential to analyse the transactions and decide the account should be debited and credited.The Journalising Includes.

  1. Analysis of Transactions :

Analysis Involves Find out the Nature of transaction and its effect in business.

Example 1 : On 01-06-2016 Cash sales to Mr .X.  $2000

Analysis: Cash  (asset) and Sales ( income) increased

Example 2: On 02-06-2016 Credit Purchase from XYZ Trading $ 5000

Analysis:Expense Increased ( Purchase)and Liability Increased ( XYZ ) Stock Increased.

  1. Recording in the Journal based on Journalising Rule or the Golden Rule of Accounting.

Based on the analysis, Find out the affected ledgers.

Example 1: Affected Ledgers are   Cash & Sales

Cash is Real Account -Apply Rule- Debit What Comes In 

Sale is a Nominal Account- Apply Rule – Credit All Incomes or gain.

Debit Aspect is –   Cash

Credit Aspect is-  Sales

Example 2: Affected Ledgers are  Purchase & XYZ Trading.

Purchase is a Nominal Account – Apply Rule – Debit all Expense

XYZ Trading is a Personal Account -Apply Rule -Credit the Giver.

Debit Aspect is – Purchase.

Credit Aspect is- Sales.

The Recorded Journals are as follows.

General Journal


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