Journal Entry (Learning with examples)
Illustration 1. Journalese the transaction given below in the books of Shankar.
Year: 2008
April 1. Shanker Commenced Business with a cash of Rs. 30000
April 3 Cash Sales Rs. 5000
April 4 Bought Machinery Rs. 10000
April 7 Sold Goods to Ravi Rs. 10000
April 9 Purchased goods from Kamala Rs. 8000
April 10 Sold goods to Kiran Rs. 6000
April 12 Paid for Stationery Rs. 1000
April 14 Carriage Expenses Rs. 500
April 15 **Bought Furniture for proportior's residence and paid cash Rs. 3000
April 17 Sold goods to Santhosh for cash Rs. 3000
April 22 Received Discount Rs. 800
April 24 Paid for wages Rs. 1200
April 26 Sales Rs. 15000
April 27 Deposited cash into Bank Rs.6000
April 28 Received cash from Mahesh Rs. 1500
April 29 Received Interest on Loan from Mr. Madhu Rs. 600
| Date | Particular | L.F (Ledger Folio) | Debit | Credit |
| April 1 2008 | Cash A/c... Dr To Shankar's Capital A/c | 30000 | 30000 | |
| Cash Comes in "DEBIT" Cash Goes Out "CREDIT" Here shankar brought cash into business. Cash came in to business "Debit" & Shakar bring cash as capital therefore shankar capital a/c as "Credit". |
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| April 3 2008 | Cash A/c... Dr To Sales A/c | 5000 | 5000 | |
| Cash Comes in "DEBIT" Cash Goes Out "CREDIT" We have sold goods and taken cash. Means Cash Coming in "Debit". Goods going out "Credit" as we sold goods. |
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| April 4 2008 | Machinery A/C....DR To Cash A/c | 10000 | 10000 | |
| Cash Comes in "DEBIT" Cash Goes Out "CREDIT" We have purchased machinery and given cash. Cash Going out "Credit". Machinery (Asset) coming in "Debit". |
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| April 7 2008*** | Ravi's A/c..... DR To Sales A/c | 10000 | 10000 | |
| Cash Comes in "DEBIT" BUT for Credit Transaction write PARTY NAME as "DEBIT" IF SOLD/SALES Cash Goes Out "CREDIT" Here we sold goods on Credit as Cash word is missing in transaction and party name mention we just need use party name instead of cash as "this party going to pay cash to us in future. |
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| April 9 2008 | Purchase a/C...DR To Kamala's A/c | 8000 | 8000 | |
| Cash Comes in "DEBIT" Cash Goes Out "CREDIT" BUT for Credit Transaction write PARTY NAME as "CREDIT" IF PURCHASED on credit We have purchased GOODS on credit. Cash Going out but in future therefore for "Credit transaction" mention party name instead of "Cash" |
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| April 10 2008 | Kiran's A/c....Dr Sales A/c | 6000 | 6000 | |
| Cash Comes in "DEBIT" BUT for Credit Transaction write PARTY NAME as "DEBIT" IF SOLD/SALES Cash Goes Out "CREDIT" Here we sold goods on Credit as Cash word is missing in transaction and party name mention we just need use party name instead of cash as "this party going to pay cash to us in future. |
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| April 12 2008 | Stationary A/c.....Dr To Cash A/c | 1000 | 1000 | |
| Cash Comes in "DEBIT" Cash Goes Out "CREDIT" CASH GOING OUT TO BUY STATIONERY - CASH WILL BE "CREDIT" |
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| April 14 2008 | Carriage A/C.....Dr To Cash A/c | 500 | 500 | |
| Cash Comes in "DEBIT" Cash Goes Out "CREDIT" CASH GOING OUT TO PAY CARRIAGE - CASH WILL BE "CREDIT" |
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| April 15 2008**** | Sankar's Drawing A/c......Dr To Cash A/c | 3000 | 3000 | |
| Cash Comes in "DEBIT" Cash Goes Out "CREDIT" Purchase furniture for personal use will not be consider in accounts book. But we paid cash from business money therefore pass entry as "Cash going out ("CREDIT CASH A/C") due to purchase furniture" and debit side use word Drawing as business money used for personal use. |
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| April 17 2008 | Cash A/c.....dr To Sales A/c | 3000 | 3000 | |
| Cash Comes in "DEBIT" Cash Goes Out "CREDIT" CASH COMING IN AS WE SOLD GOODS - CASH WILL BE "DEBIT" |
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| April 22 2008 | Cash A/c.....dr To Discount received A/c | 800 | 800 | |
| Cash Comes in "DEBIT" Cash Goes Out "CREDIT" CASH COMING IN AS WE RECEIVED DISCOUNT - CASH WILL BE "DEBIT" |
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| April 24 2008 | Wages A/c.....dr To Cash A/c | 1200 | 1200 | |
| Cash Comes in "DEBIT" Cash Goes Out "CREDIT" CASH GOING OUT TO PAY WAGES - CASH WILL BE "CREDIT" |
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| April 26 2008 | Cash A/c.....dr To Sales A/c | 15000 | 15000 | |
| Cash Comes in "DEBIT" Cash Goes Out "CREDIT" CASH COMING IN AS WE SOLD GOODS - CASH WILL BE "DEBIT" |
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| April 27 2008 | Bank A/c.....dr To Cash A/c | 10000 | 10000 | |
| Cash Comes in "DEBIT" Cash Goes Out "CREDIT" CASH GOING OUT FROM BUSINESS TO THE BANK - CASH WILL BE "CREDIT" |
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| April 28 2008 | Cash A/c........Dr To Manesh's A/c | 1500 | 1500 | |
| Cash Comes in "DEBIT" Cash Goes Out "CREDIT" CASH COMING IN AS WE RECEIVED FROM MAHESH - CASH WILL BE "DEBIT" |
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| April 29 2008 | Cash A/c........Dr To Interest received A/c | 600 | 600 | |
| Cash Comes in "DEBIT" Cash Goes Out "CREDIT" CASH COMING IN AS WE RECEIVED INTEREST - CASH WILL BE "DEBIT" |
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