Journal Entries

What is journal entry ?
Journal is a book of original entry in which transactions are recorded first of all, as and when they take place. 
As such, the journal is sub-divided into a number of sub-journals known as Special purpose subsidiary book. Each type of transaction is recorded in a separate subsidiary book. The subsidiary books may be enumerated as under:-
1. Cash Book
2. Purchases Books
3. Sales Books
4. Purchase Return Book
5. Sales Return Book
6. Bills Payable Book
7. Bills Receivable Book
8. Journal Proper

Passing basic Journal entries (without preparing proper format)         
1. For purchasing (say value 200) goods for cash.
    Purchases A/c.               Dr.       200
           To cash A/c                                    200
      (Goods purchased for cash)

2. For purchasing (say value 200) goods in credit.
    Purchases A/c                Dr.       200
            To Creditors A/c                           200
       (Purchased goods on credit)

3. For goods sold (say value 400) for cash.
    Cash A/c                          Dr.       400
             To Sales A/c                                 400
        (Goods sold for cash)

4. For goods sold (say value 400) in credit.
    Debtors A/c                  Dr.       400
             To Sales A/c                               400
        (Goods sold on credit)

5. For purchasing some assets in the              business for cash (say value 6000).
    Assets A/c                      Dr.      6000
        To Cash A/c                                     6000
         (Assets purchased for cash)

6. For making payments to creditors           of the business (say value 200). 
     Creditors A/c                  Dr.     200
           To Cash A/c                                   200
       (Payment made to creditors)

7. For receiving payments from debtors of      the business (say value 400).
    Cash A/c                         Dr.      400
         To Debtors A/c                              400
       (Payment received from debtors)

8. For Withdrawal done by the owner or                  proprietor for personal use (say value         1700).
    Drawings A/c                 Dr.      1700
          To Cash A/c                                     1700
       (Amount withdraw for personal use)

9. For rent being paid (say value 400).
    Rent A/c                       Dr.     400
          To Cash A/c.                               400
        (Rent paid)
{Similar entries for wages, salaries paid}

10. For rent being received (say value 600).
      Cash A/c.                   Dr.    600
            To Rent A/c.                          600
          (Rent received)
{Similar entries for wages, salaries received}

    
Please note these are the only basic entries for you knowledge and there entries are passed without preparing the journal account consisting of date, particulars, J.F., amount (Dr.), amount(Cr.) Columns.

If you can't understand the basic terms used above such as assets, capitals,etc. then click the link below.

Comments

Post a Comment

Popular posts from this blog

Short Selling - how it works

Image
Short selling is a trading strategy where an investor borrows shares of a stock or other asset from a broker and immediately sells them, hoping to buy them back at a lower price in the future. The investor benefits from the difference between the sale price of the borrowed shares and the lower price of their repurchase. Short selling is often used by traders who believe that the price of a particular asset will fall, or who want to hedge their portfolio against potential losses. However, this can be a risky strategy because the potential loss from a short sale is theoretically unlimited because there is no limit to  the asset's price appreciation. Short selling is also sometimes controversial, as some critics argue that it can increase market volatility and potentially lower the prices of stocks and other assets. Therefore, short selling is often subject to regulations and restrictions in various markets around the world.  Here is an example of how short selling works:  S...
Read more

What is marketing management? What are its features and functions?

CONCEPT OF MARKETING Traditionally, marketing has been defined as activities which direct the flow of products from producers to user.                        -or- Marketing is the social process by which customers obtain what they need and want through market offerings having value relevant to customers. FEATURES OF MARKETING 1. Customer needs and wants Marketing process helps the customers to obtain products which they need and want. Need of an individual is his mental feelings that he is lacking something. Want is a mental feeling of an individual that he is able to satisfy his particular need as he has adequate resources. Wants are converted into demand for products by marketers through product offerings. 2. Creating a market offering Market offering involves providing products with features which will satisfy customer needs and wants. Products include both goods which are in physical form and services which are in non-physi...
Read more

COMPETENCIES AND CHARACTERISTICS OF ETHICAL ENTREPRENEURS

COMPETENCIES         The success or failure of an enterprise depends upon the entrepreneurial values, attitudes and competencies. It is almost necessary that the entrepreneur possesses the necessary competencies then only he will be able to carry on his venture successfully. In the absence of these competencies, the entrepreneur may fail in his venture. Some people feel that these competencies are inherited or come by birth only. But this is not true. These competencies can be acquired through proper education, training and practice.       The entrepreneurial competencies can be classified as:           1. Behavioural Competencies.            2. Enterprise Launching Competencies.            3. Enterprise Managing Competencies. 1. BEHAVIOURAL COMPETENCIES     These competencies relate to the type of behaviour exhibited by the entrepreneur in performing v...
Read more