MMM is the first three letter of the month.00 is day of the month.Account Debited is amount increased or added.Account Credited is expenses.xxxx is the amount as indicated in the transaction.DateParticularsDebitCreditYYYYMMM00Account DebitedxxxxAccount Credited xxxxMMM00Account DebitedxxxxAccount Credited xxxxExplanation:
Analyzing the above transaction, you will find out that there would be an increase in assetaccount. (computer equipment) and a decrease in another asset account (cash) since SNM paidfor the equipment.You should therefore increase the asset account by debiting the computer equipment anddecrease cash by crediting it.Looking at the chart, you see that asset and expense account have balance increases whenthey are debited and balance decreases when they are credited. In direct contrast, liability,stockholder’s equity and revenue accounts have balance decreases when they are debited andbalance increases when they are credited. These are very important points to know whenrecording transaction.After analyzing and preparing the business documents, the transaction are then recorded inthe journal. A journal, also known as The Book of Original Entry, keeps record of transactionin chronological order. In Double Entry Accounting, transaction are recorded in the journalthrough journal entries.Two Kinds of Journal:General Journal- It is the simplest form of journal wherein the two column form may be used.Special Journal- Cash Receipt Journal, Cash Payment Journal, Sales Journal, Purchases Journal and some other form of combination journals are special journal.General JournalDateParticularsPRDebitCredit2015Mar17Computer Equipment20,000.00Cash20,000.00To record purchase of Computer.A General Journal contains the following columns:
* Date- The date of the transaction is entered in this column in a systematic and chronologicalmanner.* Particulars- This column contains the debit and credit and brief explanation of the entries.* Posting Reference or Folio (PR)- Contain the post reference number or the ledger page in which the account are transferred.* Debit- Contains the amount debited.* Credit- Contains the amount credited.Process in Journalizing Transactions1. The date of the transaction is on the date column starting from the year month and day of the transaction.2. The first entry is the account title/s of the debit, and is written at extreme left margin of the second column - Accounts title and explanation The amount of debit is recorded in the Debit column.3. The next entry is account title of the credit, written on the next line which is indented. Theamount of credit is recorded in Credit column 4. After the credit, a brief explanation of the transaction is entered.5. After each completed journal entry, a space is provided to record the next transaction.