Hseb Notes - Accounting XI - Journal Entry

Journal Entry

The methods of journal entries are mentioned below:

Transactions	Debit	Credit
Commencement of Business: Debit ( Expense + Loss + Assets) = Credit ( Incomes + gains + liability) Cash A/c Dr. Furniture A/c Dr. Bank A/c Dr. Stock A/c Dr.     To, Capital A/c (Being started business…..)	XXXX XXXX XXXX XXXX	XXXX
Drawing of Capital: Drawing A/c Dr.     To, Cash/Bank A/c     To, Purchase A/c (goods) (Being …………… drawn by owner).	XXXX	XXXX XXXX
Purchase & Purchase return: For purchase Purchase A/c Dr.     To, Cash/Bank A/c     To, Creditors A/c (Being purchase goods). ·         Drawing deduct the value of capital. For purchase return Name of Suppliers (receiver) A/c Dr.     To, Purchase return A/c (Being returned goods to ………..) * Purchase return deducts the value of purchase.	XXXX XXXX	XXXX XXXX XXXX
Sales & Sales return: For Sales Cash/Bank A/c Dr. Debtors A/c Dr.     To, Sales A/c (Being sold goods …….) For Sales return Sales return A/c Dr.     To, Name of giver/debtor	XXXX XXXX XXXX	XXXX XXXX
Purchase & Sales of other assets: Purchase of assets: Name of assets A/c Dr.     To, Cash/Bank A/c     To, Creditors A/c (Being purchased …….) For Sales of assets: Cash/Bank A/c Dr. Debtors A/c Dr.     To, Name of assets A/c (Being sold……….) For example: Purchased furniture of Rs. 5000 and payment made by cheque.             Furniture A/c Dr.                 To, Bank A/c             (Being purchased furniture.) *Credit customers are called debtors. *Debtors is a kind of current assets.	XXXX XXXX XXXX 5000	XXXX XXXX XXXX 5000
Expenses & Incomes: For expenses Expense A/c Dr.     To, Cash/Bank A/c (Being ………… paid). For incomes Cash/Bank A/c Dr.     To, Incomes A/c (Being received …………).	XXXX XXXX	XXXX XXXX
Discount: Trade discount: Trade discount is a reduction value in the list price of goods being purchased. For Purchased: Purchased A/c Dr     To, Name of giver A/c (Being purchased of goods at trade discount). Trade discount for sales: Name of receiver A/c Dr.     To, Sales A/c (Being sold goods ……….) Cash discount: When we provide discount: Cash/Bank A/c Dr. Discount A/c Dr.     To, Name of giver’s A/c (Being ………………) When we receive discount: Name of receiver A/c Dr.     To, Cash/Bank A/c     To, Discount (Being ……………)	XXXX XXXX XXXX XXXX XXXX	XXXX XXXX XXXX XXXX XXXX
Interest on Capital (Expense) Interest on capital A/c Dr.     To, Capital A/c (Being paid interest on capital).	XXXX	XXXX
Depreciation (Expense) Depreciation A/c Dr.     To, Name of assets A/c (Being depreciation charged on name of assets.)	XXXX	XXXX
Bad debts and bad debts recovered: For bad debts: Bad debts A/c Dr.     To, Debtors A/c (Being bad debts written off.) For bad debts recovered: Cash A/c Dr.     To, Bad debts recovered A/c (Being bad debts recovered.)	XXXX XXXX	XXXX XXXX
Goods given as charity or distributed as sample: For charity Charity A/c Dr.     To, Purchase A/c (Being goods given as charity). For sample Advertisement A/c Dr.     To, Purchase A/c (Being goods distributed as sample).	XXXX XXXX	XXXX XXXX
Lost of goods by some reasons and acceptance of insurance claims: Goods lost by ………… and insurance company not accepted the claim. Goods lost A/c Dr.     To, Purchase A/c (Being ………..) Goods lost by …………. and insurance company accepted the full claim. Insurance company A/c Dr.     To, Purchase A/c (Being …………….). Goods lost by …………. and insurance company accepted the partial claim. Insurance company A/c Dr. Goods lost by …….. A/c Dr.     To, Purchase A/c (Being ……………..).	XXXX XXXX XXXX XXXX	XXXX XXXX XXXX