JOURNAL ENTRIES : JOURNAL ENTRIES By: Noopur Gupta
Journal : Journal A journal is record of day to day transactions of a business. In simple terms, when a manual
accounting system is followed it is a collection of multi-column spreadsheets usually
contained in a hardcover binder.
Definition:
“ A chronological record of data processing”.
Rules of Journal Entries : Rules of Journal Entries How to decide which transaction is debited and which transaction to be credited:
Real Account
Personal Account
Nominal Account
Journal Entries : Journal Entries There are two types of Journal Entries:
Simple Journal Entries
Compound/Complex Journal Entries
Simple Journal Entries – With only two account heads (elements)
example…
Compound/Complex Journal Entries – With more than two account heads (elements).
Format of Simple Journal Entries : Format of Simple Journal Entries
Some Practice Exercises : Some Practice Exercises Simple Journal Entries:
Bought Furniture for cash Rs. 5,000
Paid Cash into Bank Rs. 1,00,000
Format of Complex Journal Entries : Format of Complex Journal Entries
An Example: Complex Journal Entries : An Example: Complex Journal Entries Complex journal entries can be explained further with an example:
Q. Pass necessary journal entries with the following information:
15th June Paid Rent for Rs. 5000
15th June Paid Telephone Charges Rs. 1500
Now if we pass a simple journal entry for this transaction:
Rent a/c Dr. 5,000
To Cash a/c 5,000
Telephone Charges a/c Dr. 1,500
To Cash 1,500
An Example : An Example Now you know the basics of journal entries and also the rules. Let us now take an example:
Pass necessary journal entries in the books of Mr. Ram with the following information:
1st Jan. 2001 Ibrahim a sole proprietor Commenced business with a capital of Rs. 2,00,000.
2nd Jan 2001 Bought Goods on credit from M/s Ramdas & Bros. for Rs. 10,000.
3rd Jan 2001 Paid weekly wages to workers Rs. 5,000
4th Jan 2001 Sold goods for cash Rs. 12,000 to Mr. Naryan Tiwari
5th Jan 2001 Paid Rent to the shop owner Mr. Murugan Rs. 5,000.
Slide 10 : Thank You