ANA LI Z IN G A N D

R E C O R D I N G B U SI N E SS
TR A N S A C T I O N S I N T H E
JOURNAL
 WHAT IS JOURNAL?
•IS A CHRONOLOGICAL RECORDS OF EVENTS OR BUSINESS
TRANSACTIONS SHOWING ALL THE EFFECTS OF EACH
TRANSACTION IN TERMS OF DEBITS AND CREDITS. BECAUSE
TRANSACTIONS ARE INITIALLY RECORDING IN THE JOURNAL, IT
IS CALLED THE BOOK OF ORIGINAL ENTRY.
 JOURNAL ENTRY SHOULD CONTAIN THE FF.:
• DATE – WRITE THE MONTH ON THE FIRST TRANSACTION UNLESS THERE IS A
CHANGE IN MONTH FOR THE SUCCEEDING TRANSACTIONS OR NEW PAGE IS USED.
• ACCOUNT TITLE AND EXPLANATION
• P.R. – POSTING REFERENCE
• DEBIT
• CREDIT
DATE ACCOUNT TITLE AND EXPLANATION PR DEBIT CREDIT
2022
MAY 2 CASH 101 300,000.00
ONG, CAPITAL 301 300,000.00
INITIAL INVESTMENT
JOURNALIZING?

•IS THE PROCESS OF RECORDING A TRANSACTION IN THE

JOURNAL AFTER IT HAS BEEN RECOGNIZED AND
MEASURED.
RULES OF DEBIT AND CREDIT
To debit
1. Increase in assets
2. Decrease in Liabilities
3. Decrease in Owners Equity
- Owners Withdrawal
- Expenses
To credit
1. Decrease in Asset
2. Increase in Liabilities
3. Increase in Owners Equity
- Initial Investment
- Additional investment
- Revenue/income
 ANALIZING BUSINESS TRANSACTIONS
•ALWAYS CONSIDER YOURSELF THAT YOU ARE THE BUSINESS
•DETERMINE THE KIND OF TRANSACTION OR EXCHANGE MADE
•ANALYZE THE TRANSACTION TO DETERMINE THE ACCOUNTS AFFECTED.
•DETERMINE THE EFFECT OF TRANSACTION ON THE ACCOUNTS AFFECTED.
•APPLY THE RULE OF DEBIT AND CREDIT.