Business Transaction

Business transaction is an event which affects a business financially or in other words it causes a change in its assets, liabilities and/or equity. Any event which does not affect the business financially is not recorded in accounting system.

Business transactions are recorded in a special type of register called journal.

Journal Entry Format

Each individual record in a journal is called journal entry. Journal entries are passed according to the principle of the accounting equation and it obeys the debit credit rule. Entries made

A typical journal entry displays the following information:

The format of a typical journal entry is shown below:

DateAccountDebitCredit
Jan 1Cash4,400
Capital4,400

Written by Irfanullah Jan