1. First step : Firstly we have to find out two accounts involved in the transaction. While ascertaining the two accounts, the account of a person in whose books entries are recorded should not be taken into account.
2. Second step : We have to find out whether the accounts are personal, real or nominal accounts.
3. Third step : After the second step we have to apply the relevant rules of the each account which means the account should be credited or debited.
4. Fourth step : Lastly we should pass the journal as stated earlier.
