Rules of Journalizing

The three golden rules of journalizing are based on the nature of the account, i.e., Personal Account, Real Account, or Nominal Account.

Rule 1. Personal Account

‘Debit the receiver and Credit the giver’.

Rule 2. Real Account

‘Debit what comes in and Credit what goes out’.

Rule 3. Nominal Account

‘Debit all the expenses and losses and Credit all the incomes and gains.

A journal is a book of original entries in which transactions are recorded, as and when they occur. The journal provides data-wise records of all the transactions and the amount of each transaction. Everyday transactions are recorded in a journal chronologically, giving a complete picture of the transaction in one entry. A journal recording is based on a double-entry system so the total of the debit column is equal to the credit column.