Of all types of journals, the two column journal is the simplest to use. It has a debit column and a credit column used for recording all initial transactions. Before a transaction is entered into a journal, it is necessary to determine the following:
- which accounts will be affected,
- whether the affected account increases or decreases, and
- whether the transaction should be recorded as a debit or credit.
An explanation of the transaction is desirable.
When journalizing entries it is customary to enter the accounts numbers and exact name of the accounts to be debited and credited, to write in the debit portion first above the credit portion, and to indent slightly the credit entry. The complete date of a transaction must always appear. Most often expense account will have only debit entries, revenue accounts only credit entries, while balance sheets accounts may have either.
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