Recording the transactions in chronological order with
determining debit and credit in the book of original entry (primary book) is
called journal.
determining debit and credit in the book of original entry (primary book) is
called journal.
To journalize any transaction we need to know how to
determine debit and credit.
determine debit and credit.
Asset, expenses, drawing: they are debit; if increase they
will be Debit, if decrease they will be credit
will be Debit, if decrease they will be credit
Revenue, Liability, Capital: they are Credit; if increase
they will be Credit, if decrease they will be Debit
they will be Credit, if decrease they will be Debit
The transactions of Mr. Robin, an interior decorator, in his
first month of business are as follows:
first month of business are as follows:
January 1: Mr. Robin invested Tk. 20,000 cash in business.
January 2: Purchased a used van for Tk. 5,000 cash for use
in the business.
in the business.
January 8: Purchased supplies on account for Tk. 600.
January 12: Prepared a Bill to customers Tk. 2,000 for
services provided.
services provided.
January 15: Paid Tk. 500 cash for advertising.
January 21: Received Tk. 800 cash from customers billed on
January 12.
January 12.
January 30: Withdrew Tk. 1,500 cash for personal use by Mr.
Robin.
Robin.
January 1: Mr. Robin invested Tk. 20,000 cash in
business.
business.
Cash (Asset Increased) with the amount of Tk. 20,000; so,
“CASH” is DEBIT
“CASH” is DEBIT
Owner’s Capital Increased with the amount of Tk. 20,000; So OWNER’S
CAPITAL is CREDIT
CAPITAL is CREDIT
January 2: Purchased a used van for Tk. 5,000 cash
for use in the business.
for use in the business.
Van (Asset increased) with the amount of Tk. 5,000; So, VAN
is DEBIT
is DEBIT
Cash (Asset decreased) with the amount of Tk. 5,000; So,
CASH is CREDIT
CASH is CREDIT
January 8: Purchased supplies on account for Tk. 600.
Supplies (Asset increased) with the amount of Tk. 600; So,
SUPPLIES is DEBIT
SUPPLIES is DEBIT
Accounts Payable/Trade Creditors (Liability increased) with
the amount of Tk. 600; so, TRADE CREDITORS (A/P) is CREDIT
the amount of Tk. 600; so, TRADE CREDITORS (A/P) is CREDIT
January 12: Prepared a Bill to customers Tk. 2,000
for services provided.
for services provided.
Accounts Receivable/Trade Debtors (Asset increased) with the
amount of Tk. 2,000; so, TRADE DEBTORS (A/R) is DEBIT
amount of Tk. 2,000; so, TRADE DEBTORS (A/R) is DEBIT
Service Revenue (Revenue increased) with the amount of Tk.
2,000; so, SERVICE REVENUE is CREDIT
2,000; so, SERVICE REVENUE is CREDIT
January 15: Paid Tk. 500 cash for advertising.
Advertising Expenses (Expenses increased) with the amount of
Tk. 500; so, ADVERTISING EXPENSES is DEBIT
Tk. 500; so, ADVERTISING EXPENSES is DEBIT
Cash (Asset decreased) with the amount of Tk. 500; so, CASH
is CREDIT
is CREDIT
January 21: Received Tk. 800 cash from customers
billed on January 12.
billed on January 12.
Cash (Asset increased) with the amount of Tk. 800; so, CASH
is DEBIT
is DEBIT
Trade Debtors (Asset decreased) with the amount of Tk. 800;
so, TRADE DEBTORS is CREDIT
so, TRADE DEBTORS is CREDIT
by Mr. Robin.
Owner’s drawing increased with the amount of Tk. 1,500; so, OWNER’S
DRWAING is DEBIT
Cash (Asset decreased) with the amount of Tk.DRWAING is DEBIT
1,500, so, CASH is CREDIT
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