Prepare journal entries for transactions.}

- This is Step 2 of the accounting cycle.

- A journal entry represents the debit and credit effects of a transaction in the accounting records.

- A journal entry is prepared by following three steps:

- Step 1: Analyzing the transaction.

- Step 2: Determining which accounts are affected.

- Step 3: Using the debit and credit procedures to record the effects of the transaction.

- A journal entry is recorded in chronological order and consists of the date of the transaction, the accounts affected, the amount of the transaction, and a brief explanation.