PROFORMA OF A JOURNAL

DATE PARTICULARS L.F DEBIT CREDIT

DEFINITION OF A JOURNAL


An accounting record where all business transactions are originally entered. A journal details which transactions occurred and what accounts were affected. Journal entries are usually recorded in chronological order, and using the doubledoubleentry method of bookkeeping.

JOURNAL ENTRIES
CASH TRANSACTIONS: 1. Purchased goods for cash Rs 1000.


Purchases a/c _______ Dr To Cash a/c (being cash purchases)

1000 1000

2. Sold furniture for Rs 2000 to Hari on cash. Cash a/c ________ Dr To furniture (being furniture sold) 2000 2000

CREDIT TRANSACTIONS:
1.Sold goods to gopal Rs 500. Gopal a/c ______ Dr To sales a/c 500 500

2.Machinery purchased from Shyam for Rs 10000 on account. Machinery a/c ______ Dr To Shyam a/c 10000 10000




DISCOUNTS
A) Cash Discount It has to be recorded in the books . It is the discount for prompt payment. Example : Purchase goods from Hari on a/c Rs 10000. Hari Paid 9900 after a discount of Rs 100 Purchases a/c ______ Dr 10000 To Hari a/c 10000 (Being goods purchased from Hari) Hari a/c _______ Dr 10000 To Cash a/c 9900 To Discount Received a/c 100 (Being amount paid to Hari after Discount )

 

B) Trade discount - It is a discount given on the list price

of goods which is basically given for bulk purchases. It is not to be recorded anywhere in the account books. EXAMPLE:

Sold goods worth Rs 6000 after 20% trade discount.

Ram a/c _____Dr 4800 To sales a/c 4800 (being goods sold to Ram at 20% trade

discount)

Expenses: Salary paid to Hari Rs 4000,Krishna Rs 1000,Gopal Rs 2000. Salaries a/c ____Dr 7000 To cash a/c 7000 (being salaries paid) Note: Name of the party in case of expenses paid should not appear in the books. Incomes: Interest received from Hari Rs 1000. Cash a/c ______Dr 1000 To interest a/c 1000 (being interest received)

Goods distributed as free samples: Advt/goods distributed as samples a\c __ Dr a\ To Purchases a/c 500 500

Interest due on loans: When interest is due on loans, interest a/c is debited and loan a/c is credited. Loss of stock by fire: a)Where goods are not insured and the total stock destroyed is a loss. Loss of stock by fire a/c ____Dr To purchases/trading a/c b)Where goods are insured and total loss is paid by the insurance company. Cash a/c ______Dr To purchases/trading a/c

c)Where insurance company promises to pay the loss on stock: Insurance claim a/c ___Dr To purchases/trading a/c d)Where part of the loss is promised to be paid by the insurance company: Insurance claim a/c ____Dr
(amount promised by them)

Loss of stock by fire a/c__ Dr To purchases on trading a/c

Bad Debts: Bad debts a/c ____Dr To debtors a/c Outstanding & Prepaid:  Outstanding expenses: Expenditure a/c ____Dr To o/s exp a/c  Outstanding income: Outstanding income a/c ___Dr To income a/c  Prepaid expenditure: Prepaid exp a/c ___Dr To exp a/c  Advance income: Income a/c _____Dr To advance income a/c