Compound Journal Entry | Examples | Journal

Compound Journal Entry
Share this article with your friends...

When more than two accounts are involved in single transactions is known as the compound transaction and will record as a single journal entry is known as the Compound Journal Entry. It is also known as combine journal entry.

Compound Journal Entry may be recorded as below:

  1. By debiting two or more accounts and credited only a single account.
  2. By debiting a single account and credited two or more accounts.

Treatment of journal shown step by step in earlier post. (Click here on the following link to know about it)

The Golden rules of Accounting 

The Modern Approach to Accounting

1. By debiting two or more accounts and credited only a single account:

Example 1:

On Date 01/08/2017 Sold goods to Mr Rajan worth Rs. 40,000/- and He paid Rs. 5,000/- in cash and 35,000/- By cheque.

In this above transaction three accounts are involved shown as below:

  1. Cash A/c –  Rs 5,000/- Cash received for it.
  2. Bank A/c – Balance payment made with the cheque.
  3. Sale A/c – Goods sold.
Compound entry Example 2 1 2 - Compound Journal Entry | Examples | Journal
Compound Journal Entry Example 2

 

2. By debiting a single account and credited two or more accounts.

Example 2:

On Date 01/08/2017 Purchase goods from Mr Rohan worth Rs. 30,000/- and paid him Rs. 5,000/- in cash and 25,000/- By cheque.

In this above transaction three accounts are involved shown as below:

  1. Purchase A/c – Goods purchased.
  2. Cash A/c –  Rs 5,000/- Cash paid for it.
  3. Bank A/c – Balance payment made with the cheque.
Compound entry Example - Compound Journal Entry | Examples | Journal
Compound Journal Entry Example 2

Question for Practice and it in the comment box. I will check it and tell you to answer.

  1. 01/04/2018 Mr Sohan started business with Building Rs 5,00,000, Cash Rs 50,000 Plant and machine Rs 2,50,000 and furniture Rs 1,50,000.
  2. 02/04/2018 Purchase goods form Miss Radhika for Rs 75,000 and From M/s Ramu & Sons Pvt. Ltd. For Rs. 90,000.
  3. 05/04/2018 Payment made to M/s Ramu & Sons Pvt. Ltd. and get discount of Rs 1,800/-.
  4. 05/04/2018 Sold goods to Mr Rohan worth Rs. 25,000 and to Mrs Rajni worth Rs. 15,000/-.
  5. 06/04/2018 Payment made to Miss Radhika for Rs 15,000/- by cash and 58,000/- by cheque and received discounts of Rs. 2,000/-
  6. 10/04/2018 Salary worth Rs 50,000/- and Wages worth Rs. 30,000/- paid for the month.
  7. 12/04/2018 Purchase goods worth Rs 25,000 and paid freight on it for Rs 500/-.
  8. 15/04/2018 Payment received from Mrs Rajni for Rs. 14900 after deducting Rs 100 Discount.

 

Share this article with your friends...

Leave a Reply