Introduction:- The word ‘Journal means’ a daily record.
Journal is derived from French word ‘Jour’
which means a day. It is a book of original or prime entry written up from the
various sources documents. Every transaction is recorded in the first instance
and than it is posted to the ledger. The form in which it is recorded is called
journal entry and recording or entering a transaction in the journal is known
as Journalizing.
Rules of Journalizing:- The process of passing an entry in a
journal is called Journalizing. The
rule for Journalizing is same as that of rules of debit and credit. It is based
on two facts. First is accounting equation and other is accounting approach.
1.)
Based on Accounting Equation:-
a) Increases
in assets are debits, decreases are credit.
b) Increased
in liability are credit, decreases are debits.
c) Increases
in capital are credits, decreases are debits.
d) Increases
in profits are credits, decreases are debits.
2.)
Based on Traditional Approach:-
a) Debit
the receiver, credit the giver
b) Debit
what comes in, credit what goes out.