LEARN JOURNAL ENTRY WITH IN FIVE MINUTES PART 4 ACCOUNTS

LEARN JOURNAL ENTRY WITH IN FIVE MINUTES PART 4

ACCOUNTING FOR PLUS ONE/BBA/BCOM/MBA/CA/CS FOUNDATION

MEANING OF COMPOUND JOURNAL ENTRY

A COMPOUND JOURNAL ENTRY IS AN ACCOUNTING ENTRY WHICH EFFECTS MORE THAN TWO ACCOUNT HEADS. A SIMPLE JOURNAL ENTRY HAS ONE DEBIT AND ONE CREDIT WHERE AS A COMPOUND JOURNAL ENTRY INCLUDES ONE OR MORE DEBITS AND OR CREDITS THAN A SIMPLE JOURNAL ENTRY.

LIKE SALARY PAID ,2000,RENT PAID,1000,COMMISSION PAID 500

HERE THE COMMON PART IS CASH SO WE WILL MAKE COMPOUND ENTRY

SALARY A/C -----DR 2000

RENT A/C------- DR 1,000

COMMISSION A/C ----- DR 500

TO CASH A/C 3500

( BEING SALARIES,RENT AND COMMISSION PAID)

COMPOUND JOURNAL ENTRY

SALARIES PAID 4000

WAGES PAID 2300

INTEREST PAID 2100

THE ENTRY WILL BE :-

SALARIES A/C    DR =4000

WAGES A/C       DR =2300

INTEREST A/C    DR = 2100

TO CASH A/C           = 8400

( BEING SALARIES, WAGES AND INTEREST PAID)

COMPOUND JOURNAL ENTRIES

RENT RECEIVED =1200

DIVIDEND RECEIVED =1500

INTEREST RECEIVED =1000

THE ENTRY WILL BE

CASH A/C     DR =3700

TO RENT A/C =1200

TO DIVIDEND =1500

TO INTEREST A/C = 1000

( BEING RENT, INTEREST AND DIVIDEND RECEIVED)

EXPENSES ON PURCHASE AND SALE

WHEN WE INCUR CERTAIN EXPENSES ON PURCHASE AND SALE THEY WILL BE RECORDED SEPARATELY

LIKE WE PURCHASED GOODS WORTH RS 2,000,FREIGHT PAID RS 250. HERE THE ENTRY WILL

PURCHASE A/C -------DR 2,000

FREIGHT A/C ------------DR   250

TO CASH A/C -------          2 2,50

( BEING GOODS PURCHASED,FREIGHT PAID)

GOODS PURCHASED FOR RS 10,000. CARTAGE ON PURCHASE 200

PURCHASE A/C ---DR = 10,000

TO CASH A/C                  10,000

CARTAGE A/C ----DR. 200

TO CASH A/C -----200

COMPOUND ENTRY WILL BE :-

PURCHASE A/C  DR = 10,000

CARTAGE A/C    DR =      2,00

TO CASH A/C          = 10,200

( BEING GOODS PURCHASED FOR CASH AND CARTAGE PAID)

GOODS SOLD FOR CASH RS 7000. SALES COMMISSION PAID 240

CASH A/C    DR 7000

TO SALES A/C     7000

( BEING GOODS SOLD)

SALES COMMISSION A/C DR 240

TO CASH A/C                      240

( BEING SALES COMMISSION PAID)

EXPENSE ON PURCHASE AND SALE OF INVESTMENTS OR OTHER ASSETS

A MACHINE IS PURCHASED FOR 45,000. TRANSPORTATION EXPENSES 2,000 AND INSTALLATION EXPENSES RS 1000 INCURRED ON THIS MACHINE

ALL EXPENSES ON PURCHASE OF ASSETS AND INVESTMENTS ARE CHARGED TO RELEVANT ASSETS AND INVESTMENT ACCOUNT

MACHINERY A/C ------DR 48,000

TO CASH A/C ---------48000

( BEING MACHINERY PURCHASES AND TRASNPORTATION EXPENSES 2000 AND INSTALLATION EXPENSES RS 1000 INCURRED ON PURCHASE OF THIS MACHINE)

EXPENSE ON PURCHASE AND SALE OF INVESTMENTS OR OTHER ASSETS

SHARE PURCHASED 12000 AND BROKERAGE PAID 500

INVESTMENTS A/C ---------DR. 12,500

TO CASH A/C                          12,500

( BEING SHARES PURCHASED AND BROKERAGE PAID RS 500)

LOAN TAKEN AND LOAN ADVANCED

BORROWED FROM AMANPREET RS 10,000

CASH A/C -------DR. 10,000

TO AMANPREET’S LOAN A/C =10,000

( BEING AMOUNT BORROWED FROM AMANPREET)

LEND RS 15000 TO SONIA

SONIA’S LOAN A/C    ---- DR 15,000

TO  CASH A/C  ------------15,000

( BEING LOAN MADE TO SONIA)

REPAID RS 15,000 BY SONIA

CASH A/C  ---- DR 15000

TO SONIA ‘S LOAN A/C 15000

( BEING LOAN REPAID BY SONIA)

PROBLEM

1. STARTED BUSINESS WITH RS 10,000 IN CASH AND 2500 WORTH GOODS
2. OPENED A BANK ACCOUNT AND DEPOSITED RS 3000
3. A WHO OWES RS 3000 PAYS 2,983 IN FULL SETTLEMENT
4. MR B WHO OWES RS 6000 BECAME INSOLVENT .ONLY 30 % OF THE AMOUNT REALIZED
5. BORROWED FROM SHAM RS 3000
6. MACHINERY PURCHASED FROM SOHAN FOR 22,000 AND INSTALLATION PAID IN CASH RS 500
7. GOODS PURCHASED WORTH RS 2500 FROM SOHAN AND CARTAGE PAID RS 230
8. SOLD GOODS TO RAM LAL WORTH RS 3500 AND CARRIAGE PAID 300 ON .