Journalizing and Journal Entries

Just like a diary writing where we tell and write the story of what happened to us during the day, in bookkeeping, bookkeepers also tells and writes what transpired during the day. The bookkeeper record the daily transactions and events in the books of the company in the order of its occurrence or chronological order.  In accounting, the writing of transactions and events, and the record keeping is referred to as "Bookkeeping."

And, in accounting, we call the book where we write or record the transactions and events with monetary values as the "Books of Accounts."

Books of Accounts has two classifications, the Books of Original Entry and the Books of Final Entry.

The book where we first enter the transactions and events with monetary values is the Book of Original Entry otherwise known as "Journals".

The act of recording the transactions and events with monetary values in the Books of Original Entry is JOURNALIZING.

Below is an illustrative example of a General Journal

In other words, Journalizing is the manner of recording in debit and credit forms the business transactions and events.

The entry in debit and credit forms is called JOURNAL ENTRY (which is JE in short). In recording the entry, enter the date, then, when recording the debit entry, the item is written from the leftmost side of the line item in the particulars column, and its amount is entered in the debit amount column.  While, the credit entry is entered in the next line below the debit entry and with a few spaces indented, and the amount is entered in the credit amount column. Then, the brief and clear explanation is entered indented in the next line below the credit entry.

A Journal Entry may be recorded in simple journal entry or in a compound journal entry.

A simple journal entry is an entry with one debit item and credit item with corresponding monetary amounts.

Illustrative Example:

While, a compound journal entry is an entry with at least one debit item and two or more credit items; or two or more debit items and at least one credit item; or more than one item on both debit and credit sides.

Illustrative Example:

Click here to read discussions on DEBIT and CREDIT sides