Question

When journalizing a transaction, a short explanation may be written?

Answer 1

When journalizing, it is alright to write short explanations about the transactions. Journalizing is the step in the accounting process where entries in relation to the transactions made are accounted in the books. It is important that the proper entries are made because these are the basis or the foundation in making the financial statements of the company. And these financial statements are essential to the company. The entries include the assets, liabilities,  revenues and expenses of the business entity. The nature of these accounts are either debit or credit. In journalizing these entries, it is also important that the amounts are equally balance since it is one of the basics in accounting to consider that in every transaction there is a corresponding or equal reaction.