The recording of business transactions is a basic part of financial reporting and is referred to as:

• A. Reconciling
• B. Budgeting
• C. Auditing
• D. Journalizing

Answer: (D)

Verified step by step guidance

1. Understand the concept of journalizing: Journalizing is the process of recording business transactions in the accounting journal, which is the first step in the accounting cycle. It involves documenting the details of transactions in chronological order.
2. Recognize the importance of journalizing: This step ensures that all financial transactions are accurately recorded, providing a foundation for preparing financial statements and maintaining the integrity of financial reporting.
3. Differentiate journalizing from other accounting terms: Reconciling involves comparing records to ensure accuracy, budgeting refers to planning financial resources, and auditing is the examination of financial records. Journalizing specifically refers to the act of recording transactions.
4. Learn the format of a journal entry: A journal entry typically includes the date of the transaction, accounts affected, amounts debited and credited, and a brief description of the transaction.
5. Understand how journalizing fits into the accounting cycle: Journalizing is followed by posting to the ledger, preparing a trial balance, and ultimately creating financial statements. It is a foundational step in the process.