5 Questions
Which book of account is used to initially record financial transactions in chronological order?
Journal
What is the basis for creating an accounting voucher to record transactions in the journal book?
Source documents
What is another term for the journal?
Book of Primary Entry
What is the first step in the process of journalizing?
Identify the source documents
What are the three types of accounts that can be affected by a transaction?
Personal, Real, Nominal
Study Notes
Journal and Journalizing
- The journal is the book of original entry where financial transactions are initially recorded in chronological order.
- An accounting voucher is created to record transactions in the journal book based on supporting documents such as invoices, receipts, or bank statements.
- The journal is also referred to as the "daybook".
- The first step in the process of journalizing is to identify and analyze the transaction to determine the type of account affected.
- A transaction can affect one of three types of accounts: asset accounts, liability accounts, or equity accounts.
Test your knowledge on the meaning and importance of a journal in accounting. Assess your understanding of how financial transactions are recorded in chronological order and how source documents are used to create accounting vouchers.
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