JOURNAL
Meaning of journal
Journal is a book of primary entry or a book of original entry in which transactions are first
recorded in a chronological order from the accounting voucher that are prepared on the
basis of source documents i.e., cash memo, invoices, purchase bills, etc.
Format of journal
Date Particular L.F. Amount Amount
--- --------- A/c Dr ----
---------------- A/c ------
(Being ……………..)
[narration: brief summary of transaction}
Recording in journal
Transaction are recorded in journal from the viewpoint of business because of “Business Entity
Concept”.
Journal entries
Sr. no. Particulars Rule applicable
3. Capital introduction: Amit started business introduction capital Debit what comes in
Rs.50,000 in cash and Rs.2,00,000 by cheque. Credit the receiver
Cash A/c Dr. 50,000
Bank A/c Dr. 2,00,000
To Capital A/c 2,50,000
4. Deposited RS. 10,000 in bank Debit the receiver
Bank A/c Dr. 10,000 Credit what goes out
To Cash A/c 10,000
5. Purchased goods of 15000 in cash Debit all expense
Purchase A/c Dr. 15000 Credit what goes out
To cash A/c 15000
6. Purchase goods of 75000 against cheque Debit all expense
Purchases A/c Dr. 75000 Credit the giver
To bank A/c 75000
7. Purchased goods of 5000 in cash from Ramesh Debit all expenses
Purchase A/c Dr. 5000 Credit what goes out
To cash A/c 5000
8. Purchased goods of 75000 from Ramesh Debit all expense
Purchases A/c Dr. 75000 Credit the giver
To Ramesh A/c 75000
9. Goods costing 7500 returned to Ramesh Debit the receiver
Ramesh A/c Dr. 7500 Credit all incomes
To purchase return A/c 7500
10. Sold goods for 25000 in cash Debit what comes in
Cash A/c Dr. 25000 Credit income
To Sales A/c 25000
11. Sold goods for 50000 against cheque Debit the receiver
Bank A/c Dr. 50000 Credit income
To sales A/c 50000
12. Sold goods to Bikram for 10000 against cash. Debit what comes in
Cash A/c Dr. 10,000 Credit all income
To sales 10,000
13. Sold goods to Ashutosh for 20,000. Debit the receiver
Ashutosh A/c Dr. 20,000 Credit all income
To Sales A/c 20,000
14. Ashutosh Returned goods of 5000 Debit all expense
Sales return A/c Dr. 5000 Credit the giver.
To Ashutosh A/c 5000
15. Paid salaries 20,000 in cash Debit all expenses
Salaries A/c Dr. 20,000 Credit what goes out.
To Cash A/c 20,000
16. Paid electricity expenses 2000 in cash Debit all expense
Electricity expense A/c Dr. 2000 Credit what goes out
To cash A/c 2000
17. Withdrew cash 500 for personal expense Debit the receiver
Drawings A/c Dr. 500 Credit what goes out
To cash A/c 500
18. Travelling bill 250 paid Debit all expense
Travelling expense A/c Dr. 250 Credit what goes out
To cash A/c 250
19. Advance (say, travelling) 500 given to rajiv Debit the receiver
Travelling advance A/c Dr. 500 Credit what goes out.
To cash A/c 500
20. Rajiv submitted travelling bill of 4750 balance received. Debit all expense
Cash A/c Dr. 250 Debit what comes in
Travelling expense A/c Dr. 4750 Credit the giver
To travelling advance 5000
21. Rajiv submitted travelling bill of 5500 balance received Debit all expense
Travelling expense Dr. 5500 Credit what goes out
To cash A/c 500 Credit the giver
To travelling advance 5000
22. Advance for machine 25000 by cheque to Kiran machines Debit the receiver
Advance for machines A/c OR Kiran machines A/c Dr. 25000 Credit the giver
To bank A/c 25000
23. Paid 5000 to Raman, a creditor on account Debit the receiver
Raman A/c Dr. 5000 Credit what goes out
To cash A/c 5000
24. Issued cheque for 39000 to Param, a creditor in settlement of Debit the receiver
his account of 40000 Credit the giver
Param A/c Dr. 40,000 Credit the giver
To bank A/c 39000
To discount received A/c 1000
25. Received cheque of 29500 from surrender, a debtor in Debit the receiver
settlement of his account of 30,000 Debit the expense
Bank A/c Dr. 29500 Credit the giver
Discount allowed A/c Dr. 500
To Surender A/c 30000
26. Paid telephone bill of 1000 in cash Debi the expense
Telephone expense A/c Dr. 1000 Credit what goes out.
To cash A/c 1000
27. Withdrew goods costing 5000 for personal use. Debit the receiver
Drawing A/c Dr. 5000 Credit what goes out
To purchase A/c 5000
28. Goods costing 2500 given as sample Debit the expense
Advertisement A/c OR Sale expense A/c DR. 2500 Credit what goes out
To purchase A/c 2500
29. Goods costing 2500 given as donation Debit the expense
Donation A/c Dr. 2500 Credit what goes out
To purchase A/c 2500
30. Rebate of 2000 allowed to Raman on goods sold. Debit all expense
Rebate allowed A/c Dr. 2000 Credit the giver
To Raman A/c 2000
31. Rebate of 300 received from kapil on goods purchased Debit the receiver
Kapil A/c Dr. 3000 Credit all income
To Rebate received A/c 3000
Accounting entries of some specific transaction
1. Bad debts
If an amount, say of credit sales is not recoverable or is partially recoverable then the
amount not recoverable is Bad Debt.
It being a loss for the business, is debited to the bad debts account and credited to the
personal account of the debtors.
o When the total due amount is not recoverable
Bad debts A/c Dr.
To debtor (personal) A/c
o When a part of the debt is recovered
When a debtor pays a part of due amount settlement, than amount is loss to the
business.
Cash or bank A/c Dr.
Bad debts A/c Dr.
To debtor A/c
2. Bad debt recovered
A debtor whose account was earlier written off as ‘Bad Debt’ may pay the amount partly or
fully.
The amount received is a gain to the business because the debtor’s account was earlier
written off as a bad debt i.e., loss.
Recovery of bad debt is recorded (credited) in an account titled Bad debts Recovered
account and not to the personal account of the debtor from whom the amount is received.
Cash or bank A/c Dr.
To Bad debt recovered A/c
3. Goods given as charity or goods donated
Charity/ Donation A/c Dr.
To purchase A/c
4. Distribution of goods as sample
Advertisement A/c /Samples A/c / Sales promotion A/c Dr.
To purchase A/c
5. Loss of stock by theft or fire:
Loss of stock theft/fire A/c Dr.
To purchase A/c
In case goods were insured and insurance claim for the amount of loss is lodged
Insurance co. A/c Dr.
To loss of goods by theft or fire A/c
When the full amount of claim is received from the insurance company
Bank A/c Dr.
To insurance co. A/c
When the insurance company does not pay full claim
Bank A/c Dr.
Loss of goods by theft or fire A/c Dr.
To insurance co. A/c
6. Drawings
Drawings in cash
Drawings A/c Dr.
To cash A/c
Drawing of goods
Drawings A/c Dr.
To purchase A/c
7. Year end adjusting entries
Closing stock:
Closing stock A/c Dr.
To trading A/c
Outstanding expense:
Expense A/c Dr.
To outstanding expense A/c
Prepaid expense:
Prepaid expense A/c Dr.
To expense A/c
Depreciation:
Depreciation A/c Dr.
To assets A/c
Accrued income:
Accrued income A/c Dr.
To income A/c
Income received in advance:
Income A/c
To income received in advance A/c
Interest on capital:
Interest on capital A/c Dr.
To capital A/c
Interest on drawings:
Drawings A/c Dr.
To Interest on drawings A/c
