Types of Journal Entries

There are two types of Journal Entries. These are as under : – 

(i) Simple Journal Entry : A Journal entry in which only two accounts are affected, i.e. one account is debited and the other account is credited , is known as simple entry.

For e.g. Raj started a business with cash of Rs. 50,000. In this transaction, the  journal entry would be:

Cash A/c Dr     50,000

To Raj’s Capital A/c     50,000

In this journal entry only two accounts are affected, i.e. Cash A/c  is debited and Raj’s Capital A/c  is credited

(ii) Compound Journal Entry: Compound Journal Entry is a type of journal entry in which two or more account are debited & one or more account are credited or two or more account are credited & one or more account are debited

For e.g. ” Paid Rs. 7,000 to Suraj in full settlement of his account of Rs. 10,000″ . The journal entry for the transaction would be:

Suraj’s A/c Dr     10,000

To Cash A/c            7,000

To Discount Received A/c    3,000

In this journal entry Suraj’s A/c  is debited while  two accounts  i.e. Cash A/c  and discount received A/c  are credited




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