General Journal Entries and Journal Entry Format – Introduction

Under step 11 we will be talking about how we should generalize transactions and this is closely related to the step 10 where we were covering ledgers subject and here again we will be talking about general journal so remember that the first step when we record transaction is to record it in the general journal or we can call it generalizing and this is made by making two and threes or more than two threes and simple illustration can be like this.  We debit one account and we credit another account so when cash is debited and this example share capital equity is credited.

Usually we can find two column general journal and before transaction is recorded we should analyze and determine whether this asset liability or equity (check for this sample balance sheet) or income and expenses (check for this sample income statement) so what category is impacted by the transaction and also they should determine whether the asset liability equity income expenses increased or decreased so you should know hot to record it and we should know whether debit or create the certain account.  So this is step 3 if we have asset it will be debit if we have an increase and it will be credited if we have a decrease and for liability and equity vice versa.

Credit for increases and debit for decreases so this was covered under previous steps when we were analyzing double entry principle and debits and credits and again to remind you this is 4 month of general journal and how it looks like here we have sequential number for transaction.  We have date and we have names of accounts which were impacted by the transaction and describe what type of transaction occurred and include debit side entries and credit side entries so this is in general journal format and how we generalize transaction and in the next videos we will be covering our company Zeta and we will be generalizing the transactions performed by that company during February.

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