Journal Entries

With this you will get good knowledge over some basic journal entries like purchase and sale of goods and assets. Purchase returns and Sales returns of goods, etc...

1. WELCOME TO THE
WORLD OF ACCOUNTING
BY
SUBBU PULLELA

2. Journalisderivedfromthe
Frenchword“Jour”whichmeansaday.
Journalmeansadailyrecordof
businesstransactions.Alltransactions
arefirstrecordedinthejournalasand
whentheyoccur.Therecordis
chronological,otherwiseitwouldbe
difficulttomaintaintherecordsinan
orderlymanner.
JOURNAL

3. The form of the journal is given below:
Date Particulars
L.F.
Amount
Dr.
Amount
Cr.
Date
Mon
th
Year
Name of the A/c
Debited
To Name of the
A/c Credited
Page.
No.
on
whic
hthe
A/c is
writt
en up
is
enter
ed
Amount
to be
Debited
Amount
to be
Credited
Nowwewilllearnsomejournalentries.

4. 1
st
March, Bought goods for cash ₹ 50,000
Transactions relating to purchase and sale of
goods for cash:
Purchase A/c..........Dr 50,000
To Cash A/c 50,000
(Being the goods purchased
for cash)
2
nd
March, Sold goods for cash ₹ 20,000
Cash A/c.....................Dr20,000
To Sales A/c 20,000
(Being the goods sold for
Cash)
3
rd
March, Purchased goods for cash from Siva for
₹ 10,000
Purchase A/c..........Dr 10,000
To Cash A/c 10,000
(Being the goods purchased
for cash from Siva)
4
th
March, Sold goods to Raheemfor ₹ 7,000
Cash A/c.....................Dr20,000
To Sales A/c 20,000
(Being the goods sold for
Cash to Raheem)

5. 1
st
March, Sold goods to Ram on credit ₹ 25,000
Transactions relating to purchase and sale of
goods for credit:
Ram A/c…................Dr 25,000
To Sales A/c 50,000
(Being the goods sold on
On credit to Ram.)
2
nd
March, Bought goods on account from surya
₹ 50,000
Purchase A/c..........Dr 50,000
To Surya A/c 50,000
(Being the goods purchased
from suryaon credit.)
3
rd
March, Purchased goods from arya₹ 10,000
Purchase A/c..........Dr 10,000
To AryaA/c 10,000
(Being the goods purchased
from Aryaon credit)

6. 10
th
March, Ram returned goods worth ₹ 2,500
Transactions relating to Return of goods:
Sales Return A/c.....Dr 2,500
To Ram A/c 2,500
(Being the goods returned
to Ram)
11
th
March, Returns goods to Surya ₹ 5,000
Surya A/c....................Dr5,000
To Purchase Returns A/c 5,000
(Being the goods returned
to Surya)
12
th
March, Returned goods to Aryaof ₹ 1,000
AryaA/c………...........Dr 1,000
To Purchase Returns A/c 1,000
(Being the goods returned
to Arya)
13
th
March, Returned goods to Narendra₹ 1,500.
Previously bought for cash
Cash A/c.....................Dr1,500
To Purchase Returns A/c 1,500
(Being the goods sold for
Cash to Raheem)

7. 1
st
May, Purchased building of ₹ 5,00,000
Transactions relating to Purchase and Sale of
Assets:
Building A/c……….....Dr 5,00,000
To Cash A/c 5,00,000
(Being the Building purchased
for cash)
2
nd
May, Bought furniture from Godrej & Co. ₹ 10,000
Furniture A/c…………Dr 10,000
To Godrej & Co. A/c 10,000
(Being the furniture purchased
for credit)
3
rd
May, Sold old machinery ₹ 20,000
Cash A/c………...............Dr 20,000
To Machinery A/c 20,000
(Being the Machinery sold
for cash)
4
th
May, Sold old typewriter to Venkatfor ₹ 2,500.
VenkatA/c.....................Dr2,000
To Typewriter A/c 2,000
(Being the sold on credit basis)

8. In the next post I’ll show you
Transactions related to Income and
Expenses.
Transactions related to Receipts and
Payments
Transactions related to Proprietor
Transactions related to Discount
Transactions related to Bad Debts