Examples of Journal Entries

Practice Exercise: Transactions to Journalise

1. Mohan Started business with cash — ₹40,000
2. Deposited in bank — ₹30,000
3. Bought goods for cash — ₹5,000
4. Sold goods to sumit — ₹2,500
5. Bought goods from Parvat — ₹5,100
6. Received cash from sumit — ₹1,950
7. Discount allowed — ₹50
8. Paid cash to Parvat — ₹3,900
9. Discount received — ₹1,200
10. Received cash for goods sold — ₹2,750
11. Bought goods from Mohit — ₹2,350
12. Withdrew for private expenses — ₹1,000
13. Received cash from Sumit and deposited into bank — ₹500
14. Paid sundry trade expenses — ₹250
15. Paid Rent — ₹450
16. Paid cash to Mohit — ₹2,300
17. Discount received — ₹50
18. Goods sold to Romy — ₹4,750
19. Paid for carriage — ₹50

Complete Solution for Practice Exercise

No.	Particulars	L/F	Debit (₹)	Credit (₹)
(a)	Cash A/c ........................................... Dr. To Capital A/c (Being business started with cash)		40,000	40,000
(b)	Bank A/c ........................................... Dr. To Cash A/c (Being cash deposited into bank)		30,000	30,000
(c)	Purchase A/c ....................................... Dr. To Cash A/c (Being goods bought for cash)		5,000	5,000
(d)	Sumit A/c .......................................... Dr. To Sales A/c (Being goods sold to Sumit on credit)		2,500	2,500
(e)	Purchase A/c ....................................... Dr. To Parvat A/c (Being goods purchased from Parvat on credit)		5,100	5,100
(f & g)	Cash A/c ........................................... Dr. Discount Allowed A/c ............................... Dr. To Sumit A/c (Being cash received and discount allowed)		1,950 50	2,000
(h & i)	Parvat A/c ......................................... Dr. To Cash A/c To Discount Received A/c (Being cash paid and discount received)		5,100	3,900 1,200
(j)	Cash A/c ........................................... Dr. To Sales A/c (Being cash received for goods sold)		2,750	2,750
(k)	Purchase A/c ....................................... Dr. To Mohit A/c (Being goods bought from Mohit on credit)		2,350	2,350
(l)	Drawings A/c ....................................... Dr. To Cash A/c (Being cash withdrawn for personal use)		1,000	1,000
(m)	Bank A/c ........................................... Dr. To Sumit A/c (Being balance received from Sumit & deposited into bank)		500	500
(n)	Sundry Trade Expenses A/c .......................... Dr. To Cash A/c (Being sundry trade expenses paid)		250	250
(o)	Rent A/c ........................................... Dr. To Cash A/c (Being rent paid in cash)		450	450
(p & q)	Mohit A/c .......................................... Dr. To Cash A/c To Discount Received A/c (Being payment made to Mohit and discount received)		2,350	2,300 50
(r)	Romy A/c ........................................... Dr. To Sales A/c (Being goods sold to Romy on credit)		4,750	4,750
(s)	Carriage A/c ....................................... Dr. To Cash A/c (Being carriage charges paid)		50	50

Frequently Asked Questions

What is the difference between Trade Discount and Cash Discount?

Trade Discount is given at the time of purchase or sale and is subtracted directly from the catalogue price; it is never entered in the journal book. Cash Discount is given for prompt payment and is recorded in the journal under Discount Allowed or Discount Received.

Why is "Drawings" debited when cash is taken for private use?

Under the Business Entity Concept, the owner and business are separate. When the owner takes money out for personal use, it reduces the business's liability toward the owner, so the Drawings Account (a Personal Account representing the proprietor) is debited.

Why is Office Equipment (Adding Machine, Typewriter) not debited to Purchases A/c?

The Purchases Account is strictly reserved for goods bought for resale. Long-term office assets like Typewriters, Furniture, or Adding Machines are fixed assets and must be debited to their individual asset accounts.