Compound journal entry
| Compound journal entry |
|---|
| See also |
Compound journal entry is one of two types of entries in the general journal entry. Unlike the "simple entry" in which transaction posting applies to only two accounts (one debit account and one credit account), an ompound entry is a transaction posting that affects three or more accounts[1].
Types of recording
it is an accounting entry with the following combinations[2]:
- One debit and two or more credits
- One credit and two or more debits
- Two or more debits and credits.
Circumstances
Below conditions must be met[3]:
- Only one account for all different transactions must be either debit or credit,
- Date of making the transaction should be the same,
- Their nature should be the same.
In a coumpond journal entry, credit, debit or both parts of an entry consist of more than one account.
An example
Case study: on 1st of July, the company buys a delivery van costs $1,4400 years, now pays $8800 cash and agrees to pay the remaining $6600 on the account (to be paid later)
| General journal | |||||
|---|---|---|---|---|---|
| Date | Description | Ref. | Debit | Credit | |
| July1 | |||||
| 10 | Equipment | 1,4400 | |||
| Cash in Checking | 8800 | ||||
| Accounts Payable (Purchased van for cash with balance on account) | 6600 | ||||
The standard format requires all charges to be exchanged before the credit[4].
Footnotes
References
- Banerjee B, K., (2010)Financial Accounting : Concepts, Analyses, Methods And Uses P H I Learning Pvt. Ltd., 2010
- Chatfield M., Vangermeersch R., (2014)The History of Accounting (RLE Accounting): An International Encylopedia Routledge, 2014
- Donatila A. J. (2007)Fundamentals of Accounting: Basic Accounting Principles Simplified for Accounting Students, AuthorHouse, 2007
- Kumar V., (2018)Accounting Course,Accounting Education , 2018
- Tulsian P.C. & Tulsian Bharat, (2014), Financial Accounting for B.Com. (Programme), S. Chand Publishing, 2014
- Weil BS. H., Noi S. A., (2001), Introductory Accounting Skills: For Financial and Management Accounting Students, Juta and Company Ltd, 2001
- Weygandt J. J., Kieso E.D., (2018)Accounting Principles, John Wiley & Sons, 2018
Author: Agnieszka Katarzyna Sikora
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