The double-entry system stipulates that, for every transaction, the amounts recorded on the debit side should equal the credit side: .
A journal (also called a general journal) is a place where each transaction is recorded in chronological order. The journal entry is the first step in recording transactions (this is also called original entry). The journal shows all the information about a transaction in one place. In the journal, accounts that will be debited are listed first, and then accounts that will be credited are indented adhering to the requirement of debits to the left and credits to the right.
The accounting journal is the historical record of the financial transactions of the company. Most companies record their journal entries using computer accounting software programs, which enable accountants to efficiently record the financial history of the company. Certified accounting software programs maintain the integrity of the original journal and prohibit erasures or deletions, requiring explanations to accompany corrections. Any software program that allows deletion of data is not credible for auditing purposes and may be invalidated if the company’s financial records are questioned. The purpose of the journal is to provide a permanent historical record of every financial transaction.
Once the transactions are recorded in the journal, each debit and credit is transferred to the proper ledger account (T-Account) to determine the balance of each account. This process is called posting. Taking each one of the journal transactions involving cash and putting them into your checkbook is analogous to the posting process.