Special Entries

Transfer Entries

Journal is the primary book of accounts in which we originally record transactions in chronological order. It is a book of original entry because we first enter a transaction in the Journal from where we then post it to the ledger. Ledger is a book or register which contains, in a summarized and classified form, a permanent record of all transactions. It is the most important book of accounts since we draw the trial balance from it. Learn transfer entries here.

Types of Entries

There are the following types of entries in accounting :

  1. Opening entries
  2. Transfer entries
  3. Adjustment entries
  4. Closing entries

Transfer Entries

Sometimes it is necessary to transfer an amount or balance of one account to some other account. We do this by means of a transfer journal entry in the Journal Proper.

We use a Transfer Journal Entry to allocate an expense or revenue from one account to another. It is used to transfer funds between object codes within an account or sponsored project.

Browse more Topics under Special Entries

Transfers journal entries shall include a description of the items and an explanation of why the transfer is necessary.

Transfer Entries

Source: freepik.com

  1. Amount withdrawn from Capital
xx Capital A/c Dr. xxx
            To Drawings A/c xxx
( Being amount is withdrawn from capital)


  1. Amount withdrawn from the bank
xx   Cash A/c Dr. xxx
            To Bank A/c xxx
( Being amount withdrawn from the bank)

Learn more about Closing Entries here in detail.

  1. Cash deposited at the bank
xx   Bank A/c Dr. xxx
            To Cash A/c xxx
( Being deposit of cash at the bank)


  1. Amount received for petty cash
xx   Petty Cash A/c Dr. xxx
            To Cash A/c xxx
( Being amount received for petty cash)

Solved Example For You

Following Balances appear in the books of Rajesh as on 31st March 2017. Pass the necessary journal entry for 2017-18:

Credit balances: Capital – ₹ 300,000; Bills Payable – ₹ 50,000; Creditors –  ₹ 100,000

Debit balances : Furniture –  ₹ 40,000; Machinery –  ₹ 180,000; Debtors –  ₹ 120,000; B/R  – ₹ 90,000;  Cash –  ₹ 20,000

  1. An amount of ₹ 20,000 has been withdrawn from the capital a/c on 20th May 2017.
  2. Cash deposited at the bank for ₹ 5,000 on 17th July 2017.
  3. Bought goods from Mahesh for cash for ₹ 10,000 on 18th July 2017.
  4. Sold goods worth ₹ 5,000 for cash for ₹ 10,000 on 21st July 2017.
  5. Purchased stationery for cash on 20th August 2017 of ₹ 1,200.
  6. On 5th September 2017 withdrew from the bank for personal use an amount of ₹ 1,500.
  7. Paid rent for ₹ 2,000 on 15th October 2017.
  8. Goods worth ₹ 500 given as charity on 25th November 2017.



Journal Entries

Date Particulars   Amount (Dr) Amount (Cr)
Apr 1 Furniture A/c Dr. 40,000
Machinery A/c Dr. 180,000
Debtors A/c Dr. 120,000
Bills Receivable A/c Dr. 90,000
Cash A/c Dr. 20,000
To Capital A/c 300,000
To Bills Payable A/c 50,000
To Creditors A/c 100,000
( Being opening entry )
May 20 Capital A/c Dr. 20,000
To Drawings A/c 20,000
( Being amount withdrawn from capital)
July 17 Bank A/c Dr. 5,000
To Cash A/c 5,000
( Being deposit of cash at the bank )
July 18 Purchase A/c Dr. 10,000
To Cash A/c 10,000
( Being purchase of goods for cash )
July 21 Cash A/c Dr. 10,000
To Sales A/c 10,000
( Being sale of goods for cash )
Aug 20 Stationery A/c Dr. 1,200
To Cash A/c 1,200
( Being purchase of stationary for cash)
Sept 5 Drawings A/c Dr. 1,500
To Bank A/c 1,500
( Being  cash withdrawn from bank for personal  use)
Oct 15 Rent A/c Dr. 2,000
To Cash A/c 2,000
( Being payment for rent )
Nov 25 Charity A/c Dr. 500
To Purchase A/c 500
( Being distribution of goods as charity )


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