Goods lost

 Stock destroyed or damaged by fire or accident etc.
1) When actual goods destroyed or damaged or lost
Loss of goods A/c Dr
(Amt of irrecoverable loss)
Insurance claim receivable A/c Dr
(To the extent of the loss recoverable )
To Purchase A/c
(Total amt of loss)
2) When Compensation received from Insurance Co./Railways etc
Bank A/c Dr
To Insurance claim receivable A/c
(Amt to the extent of the loss recovered )
Goods given Away
 Sometimes a business enterprise gives goods without
any consideration, such as giving free samples for sales
promotion , giving goods in charity, gift for client
entertainment & for sales promotion.
 Sometimes owner uses the goods for his personal use.
 The Journal Entry in such cases will be
 Free samples A/C/ Donation A/C / Drawings A/C Dr
To Purchase A/C
Drawings made by the proprietor
a) Cash drawn
Drawings A/c Dr.
To Bank/Cash A/c
b) Goods withdrawn for personal use :
Drawings A/c Dr.
To Purchase A/c
Loss on Account of Bad Debts
 Bad Debts is a loss on account of non recovery
of dues from credit customers.
 JE
 At the time of sale
Party’s A/c Dr
To Sales A/c
Writing off bad debts
Cash/ Bank A/c Dr (Only if any cash received )
Bad Debts A/c Dr (For the amount of loss)
To Party’s A/c (Total amount)
Dishonour of Cheque Deposited in Bank
 The incidence of non-clearance of cheque due to certain
reasons is called Dishonour of Cheque .
 It is also called bouncing of cheque.
 Entry at the time of depositing the cheque
Bank A/C Dr.
To Party’s A/c
When Bank intimates about the Dishonour of
Party’s A/c Dr.
To Bank A/C
If Bank levied some bank charges for dishonour
Party’s A/c Dr.
Bank charges A/c Dr
To Bank A/C
Compound Entry
 Set of transactions take place on a single day which
are of same nature
 E.g. either expenses or revenue
 Salary A/c Dr 10,000
Rent A/c Dr 5,000
To Cash A/c 15,000
 Journalize the following transactions in books of Varun Enterprises
2010 July
 1 Varun commenced business with 10,00,000 cash and a building worth
 3 Purchased goods in the beginning 5,00,000
 7 Sold goods to Dinesh & co. and received cheque & deposited in bank
 8 The bank has informed that the Bank has returned the above cheque as it
was dishonoured.
 17 Goods sold to Ramanuj & co Rs.60,000
 18 Purchased goods worth Rs. 10000 less 10% Trade discount from Shekhar
 19 Paid Commission Rs. 11,000
 20 Goods burnt by the fires 39,000
 21 Received cash on account from Dinesh 33,000
 25 Goods distributed as free samples.50,000
 26 Received Rs. 57,500 from Ramanuj & co in full settlement.
 27 Withdraw cash for personal use 50,000
 28 Purchased machinery by cheque 2,00,000
 30 Purchased goods for cash 50,000
 31 Borrowed a loan from Bank 5,00,000