JOURNALIZING

TRANSACTIONS
AT THE END OF THE LESSON, THE STUDENT
SHOULD BE ABLE TO:
• UNDERSTAND AND ANALYZE THE TRANSACTIONS
• IDENTIFY WHAT ACCOUNT TITLES ARE AFFECTED IN THE
GIVEN TRANSACTIONS.
• LEARN HOW TO ENTER DATA IN A JOURNAL
 -ENTERING TRANSACTION DATA IN THE JOURNAL IS KNOWN
AS JOURNALIZING

• SINGLE ENTRY – ENTRY WHICH CONSISTS OF ONLY ONE

DEBIT OR ONE CREDIT
• COMPOUND ENTRY – ENTRY WHICH CONSISTS OF TWO OR
MORE DEBITS OR TWO OR MORE CREDITS
THE PARTS OF A COMPLETE JOURNAL ENTRY ARE DATE; ACCOUNTS AND
AMOUNT, BOTH DEBIT AND CREDIT; AND BRIEF EXPLANATION.
 Importance of Journal
1. It provides a permanent record.
2. It provides easy access to accounting data since
transactions are chronologically recorded.
3. Verification as to where the data are posted is made easier
by the Posting Reference (PR) column.
4. Explanations will easily inform the reader of the nature of
the business transactions.
Different Types of Journal
A journal is classified as follows:

1. General journal
a. Two-column journal
b. Four-column journal
2. Special journal
 Two Column Journal

An example of two-column journal follows:

Date Description PR Debit Credit

           
           
Date – when the transaction is recorded
Description – where the account titles are recorded and a brief
description of the transaction
PR – Posting Reference of Folio (F) indicating the number of
the account where the accounting data are posted
Debit – money column to record the Debit amount
Credit - money column to record the Credit amount
Guidelines on the Use of the Two-Column General Journal

1. The date should be recorded. Date includes the year, month, and day
when the transaction was made.
2. The debit should be recorded. Account to be debited is written at the
extreme left of the Description column. If two or more accounts are
debited, they are placed along the same margin. All debit accounts
written first before the credit accounts. All account titles begin with
capital letters. The corresponding debit amount is written on the first
Money column – the Debit column. If two or more amounts are debited,
their total should equal the total credit amount.
3. The credit should be recorded. Account to be credited is written on

the following line and indented ½ inch to the right of the account

debited to distinguish it from the debit account. If two or more

accounts are credited, they are all indented ½ inch from the account

debited. The corresponding credit amount is written on the second

Money column – the Credit column. If two or more amounts are

credited, their total should equal the total debit amount.

5. A line or a space is usually left free after each entry.

6. Entries are recorded in the PR column or Folio Column. The

number written in this column represents the account number of

the account to where the entry was posted.

7. Entries are recorded in the Money columns. Since a journal

provides Money columns with specific spaces for each account,

commas and periods are omitted.

8. A peso sign is used in the Debit and Credit columns. Since debit

and credit are money columns, numbers recorded in these columns

are money values in pesos. Peso sign is used only for the first entry

and not repeated for any subsequent entry.

9. The total of the debit and credit columns are not usually totaled

since each journal entry should be equal.

Guidelines on the Use of the Four-Column Journal

1. For transactions affecting cash, the amount is recorded either in the

Debit or Credit column as the case may be and the contra account is

recorded under the Particulars column without being indented. The

corresponding amount of the contra account is recorded either in the

Debit or Credit side of Sundry Accounts column.

2. For transactions not affecting Cash at all, follow the same

guidelines as in the two-column journal. Write the accounts under the

Particulars column and the amounts under Sundry Accounts column.

3. For compound entries the two debit accounts are written

individually in the Particulars column and the total credit to Cash is

written on the same line with the last account debited.

4. Unlike the two-column journal, the four-column journal is footed

so as to prove the equality of debits and credits and to facilitate

posting.

5. No explanation is provided in each transaction.