What is Journalizing - 5 Steps In Journalizing With Order of Steps To Journalize An Entry In Accounting

A Journalizing is the process of recording Business Transactions from voucher or Invoice such as Sales Invoice, Purchase Invoice, Purchase Voucher, Sales Voucher etc., in the relevant Subsjournals of accounts.

For Example, Mr. A, as a Sole Proprietor started business with Cash Rs. 20000.

You Can Also Study, "5 Steps In Posting"

The Format of Journal

Date                    Particulars / Description               L/F                 Debit           Credit

2018                                                                                                  Rs.               Rs.

July

1^st July                  Cash a/c                                      3                    20000

                                            Capital a/c                     5                                        20000

                            (Business Started Witch Cash)

There are five steps in Journalizing An Entry which are mentioned below in order of sequence:

1. Enter the Date

A Journal always records business transactions date-wise or chronologically. It is written on first column. It contains Year, Month along with date as shown in the above format.

2. Enter the Debit Accounts And Amount

In the second column, debit accounts are recorded with the amount on debit column as in our example Cash is debited with the amount of Rs. 20000 in debit column.

3. Enter the Debit Accounts With Amount In Credit Column

All of those accounts which are credited are written in this column along with the amount in Credit Columns.

4. Ledger Folio

The page number of Ledger Book where concerned accounts are posted or transferred from Journal to concerned Subsidiary Ledgers are written in this column.

5. Explanation or Narration of Journal Entry

In this step, a brief explanation of business transaction is written on Particulars / Description Column just before the debits and credit account to show what accounting treatment is made with accounts and as result we can easily know the reasons why accounts are debited and which accounts are credited.

So, these are 5 steps of Journalizing with the order in sequence when you journalize an entry in a Journal.