Compound Journal Entry: Types of Entries and Solved Examples

A compound journal entry is an entry in which there is more than one debit, more than one credit, or more than one of both debits and credits. It is a combination of several simple journal entries.

Compound Journal Entry

We record some transactions which are inter-connected and take place simultaneously by means of a compound journal entry. For example, we record the receipt of cash from a debtor and allowance of discount to him through a single journal entry.

Similarly, we record the transactions of the same nature through a combined entry provided they take place the same day. For example, if the amount is spent on the same day for salaries, wages, stationery items, rent, etc. a combined entry may be passed debiting all the relevant nominal accounts with respective amounts and crediting cash account with the total amount spent.

Browse more Topics under Recording Transactions

Following entry to be made

Date	Particular		Amount (Dr.)	Amount (Cr.)
XXX	Salary a/c	Dr.	XXX
	Wages a/c	Dr.	XXX
	Stationery a/c	Dr.	XXX
	Rent a/c	Dr.	XXX
	To cash a/c	Cr.		XXX

Compound Journal Entry

Solved Example on Compound Journal Entry

Journalise the following transactions

2016
March 2	Commenced business with cash	2,50,0000
March 4	Purchased furniture for cash	20,0000
March 4	Cash purchases	1,45,0000
March 5	Deposited with bank	30,0000
March 6	Purchase from Patil	40,0000
	Sold to Natarajan for cash	14,3000
March 7	Sold to Mukherjee	8,0800
March 9	Drawings by the proprietor for household expenses	4,0000
	Goods were taken out by the proprietor for domestic use	5000
March 9	Cash was withdrawn from Bank	25,0000
March 18	Mukherjee becomes insolvent. A dividend of 50 paise in a rupee is received	4,0400
March 18	Purchase of a Scooter for cash	30,0000
March 20	Sold goods to Aggarwal	8,6400
	Sales to Nayak	3,7800
March 24	Cartage paid in cash	1500
March 26	Payment of cash for petrol	5500
March 26	Purchases of goods for cash	12,0000
March 26	Purchases of Office Equipment for cash	12,1000
March 31	Depreciation on furniture	1000
	Depreciation on Scooter	2000

Ans.

Journal entries

Date	Particulars		Amount(Dr.)	Amount(Cr.)
2016
March 2	Cash A/c	Dr.	2,50,0000
	To Capital A/c			2,50,0000
	(For cash brought in by the proprietor as capital)
March 4	Furniture A/c	Dr.	20,0000
	Purchases A/c	Dr.	1,45,0000
	To Cash A/c			1,65,0000
	(For purchase of goods and furniture in cash)
March 5	Bank	Dr.	30,0000
	To Cash A/c			30,0000
	(For cash deposited with the bank)
March 6	Purchases A/c	Dr.	40,0000
	To Patil A/c			40,0000
	(For credit purchases of goods)
March 6	Cash A/c	Dr.	14,3000
	To Sales A/c			14,3000
	(For cash sales made to Natarajan)
March 7	Mukherjee A/c	Dr.	8,0800
	To Sales A/c			8,0800
	(For credit sales of goods to Mukherjee)
March 9	Drawings A/c	Dr.	4,5000
	To Cash A/c			4,0000
	To Purchases A/c			5,000
	(For drawings in cash and goods by the proprietor)
March 9	Cash A/c	Dr.	25,0000
	To Bank A/c			25,0000
	(For cash withdrawn from Bank)
March 18	Cash A/c	Dr.	4,0400
	Bad Debts A/c		4,0400
	To Mukherjee A/c			8,0800
	(being cash received from Mukherjee on his insolvency and the amount is written off as bad debt)
March 18	Scooter A/c	Dr.	30,0000
	To Cash A/c			30,0000
	(For purchase of a scooter for cash)
March 20	Aggarwal A/c	Dr.	8,6400
	Nayak A/c	Dr.	3,7800
	To Sales A/c			12,4200
	(For credit sales made to Aggarwal and Nayak)
March 24	Cartage A/c	Dr.	1500
	To Cash A/c			1500
	(Cartage paid)
March 26	Petrol Expense A/c	Dr.	5500
	Purchases A/c	Dr.	120000
	Office Equipment A/c	Dr.	121000
	To Cash A/c			246500
	(For petrol expenses, purchase of goods and purchase of office equipment)
March 31	Depreciation on furniture A/c	Dr.	1000
	To Furniture A/c			1000
	(For depreciation on furniture)
March 31	Depreciation on scooter A/c	Dr.	2000
	To Scooter A/c			2000
	(For depreciation on the scooter)