11RQ - Horngren'S Financial And Managerial Accounting

Question

Explain the five steps in journalizing and posting transactions.

 

Step-by-Step Solution

Answer

Journal is the record of business transactions and there are five steps to journalizing and posting journal entries.

Definition of Journal

The journal is defined as the record of the transaction in a chronological manner i.e. according to the date of order.

Steps in journalizing and posting transactions

The first step is to identify the account and the type of account.

The second step is to decide whether each account increases or decrease.

Step three is to record the transaction in the journal.

Step four is to post the journal entry to the ledger.

The fifth step is to determine the accounting is in balance or not.