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Accountancy > Recording Transactions > Compound Journal Entry
Recording Transactions

Compound Journal Entry

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.

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Combined Journal Entry
Journal Entry for different Transactions
Characteristics of Journal book
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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.

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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March 9 Cash was withdrawn from Bank 25,0000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)

 

 

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