1. Read and understand each transaction.

2. Specify the account, titles affected by the

transaction. Classify them as asset, liability,

or owner’s equity.

3. Determine whether the transaction results in

an increase or decrease in each account.

4. Using the rules of debits and credit,

determine whether to debit or credit the

account to record its increase or decrease.

5. Enter the transaction in the journal.

6. Write the date of transaction.

7. Debit the account title fist and the amount

opposite to it and under the debit column.

The credit account title is written next and

indented. The credit amount should be

written under the credit column.