How to Prepare Journal Entry

The book in which transactions are written systematically for the first time is known as journal . The process of recording transactions in journal is treated to be as journalizing.  There are five columns in journal entries as follows: Date, Particulars, Lf, Dr Amount , CR Amount .  Lf stands for ledger  folio.  DR- WITHDRAWL AND CR-CREDIT OR DEPOSIT. This is based on double entry system (dual aspect).Another name of journal is books of original entry. See the examples for journal entries- .Journalizing the following  transactions :

1. Started business with capital rs1000000.

2. Purchased goods from Mohan rs100.

3. Sold goods to Mohan rs1000.

4. Rent paid Rs1ooo.

5. Commission received rs100.

6. Withdrew cash for private use.

7. Withdrew goods for personal use.

8. Purchased furniture for cash Rs 1ooo.

9. Goods worth Rs 2000 were destroyed by fire.

10. Returned defective goods worth 1000 to Mohan.

11. withdrew from bank for office use rs1000.

12. Withdrew from bank for personal use Rs 10000.

Journal entries

Date PARTICULARS LF Dr amount  Cr amount
1. Cash A/C-                                      DrTO CAPITAL A/C 1000000 1oooooo
2. Purchases A/c-                             DrTo Mohan A/c 100 100
3. Mohan A/C-                                  DrTO Sales A/C 1000 1000
4. Rent A/C-                                       DrTo cash A/C 1000 1000
5. Cash A/C-                                         DrTo commission A/C 100  

100

6.  Drawings A/C—                             DrTo Cash A/C NIL NIL
7. Drawings A/C-                                  DrTo purchases NIL NIL

 

8. Furniture A/C—                           DrTO cash 1000 1000
9. Loss by fire A/c  –                         DrTo purchases 2000 2000
10. Mohan A/C –                                   DrTo purchases return 1000 1000
11. Cash A/C-                                           DrTo bank 1000 1000
12. Drawings A/c –                           DrTO Cash or Bank A/C 10000 10000
Totals 1017200 1017200

 

NOTES-  The total of all debits must be equal to the total of all credits.

See the ledger for it

Leave a Reply

Your email address will not be published. Required fields are marked *