Modern Rules
Type of Account Rule Increase ↑ Decrease ↓
Expenses Ist Debit Credit
Assets Ist Debit Credit
Loss Ist Debit Credit
Capital IInd Credit Debit
Revenues IInd Credit Debit
Income IInd Credit Debit
Liabilities IInd Credit Debit
Gain IInd Credit Debit
COMPOUND JOURNAL ENTRIES
A compound journal entry is an entry in which there is more than one debit, more than one credit,
or more than one of both debits and credits. It is a combination of several simple journal entries.
•Multiple Accounts: Involves more than two accounts.
•Balanced: The total amount of debits must equal the total amount of credits.
•Complex Transactions: Used for recording transactions that impact several accounts at once.
1. Bought Furniture for 5,000, Machinery for 10,000 , 40% payment made by cheque immediately.
2. Withdraw goods 20,000 & cash 10,000 for Personal Use.
3. Received from travelling Salesman 2000 of goods sold by him, travelling expense 100.
4. Purchase goods from Mohan Singh on credit 40,000 and also paid carriage of 2,000.
5. Purchased Stationery 3,000 & postage stamp 2,000 in Cash.
6. Paid Salaries 20,000, Rent 5,000 and Wages 6,000 by cheque.
7. Purchased goods from Hari Ram 30,000 at 10% trade discount and 2% cash discount Payment was
made immediately.
8. Paid to Raju 5,000 in cash and 7,000 by cheque.
9. Goods sold to Reema for 5,000 at 20% Trade discount and 5% Cash discount. Half of the Payment
was received immediately.
10. Additional Capital introduced as: Cash 10,000 and Delivery Van (Personal Asset)of 50,000.
11. Paid 48,000 to Mohan in settlement of his Account for 5,000.
12. Sold goods to Ramesh for 8,000. he paid 5,000 by cheque immediately
13. Received Cash 20,000 from XYZ and Deposit into Bank Same Day.
14. A running business was Purchased by Amit with following assets and Liabilities:
Cash 20,000, Land 40,000, Furniture 10,000, Creditor 10,000 and Bank overdraft 20,000.
15. Paid cash to Mayra 9750 & received cash discount 250
16. Shyam, who owed 15,000 become insolvent and 50% is Received from his estate.
17. Sold goods to Mayank 1,00,000, Payable 25% by cheque at the time of sale and balance after 30 days of sale.
18. Received 11,700 from Hari Krishan in full settlement of his account for 12,000.
19. Paid 2,880 to S.K Gupta on his Account for 3,000.
20. Raj, who owed Mohan Singh 25,000 became insolvent and received 15,000 as full and final settlement.
21. Raghu Started business with cash 80,000 , Goods 40,000 and Furniture 20,000.
22. Paid rent 8,000 , Trade Expenses 400 & Travelling Expense 500.
23. Cash invested in Share 50,000, Brokerage paid 2%.
24. Proprietor withdrew for private use 4,000 from office and 6,000 from Bank.
25. Goods lost in an accident worth 15,000. These were insured and insurance company admitted a claim 12,000 only.
26. Purchased land and a small office building. The land was worth 1,50,000 and the building worth 3,50,000. The
Purchase price was paid with 3,00,000 cash and bills payable for 5,00,000.
27. Purchase new office Equipment worth 1,00,000 by paying 93000 cash and balance in exchange of old equipment
(book value 15,000) with a recorded value of 7,000.
28. Loan repaid 20,000, being 12,000 as interest and 8,000 as principal Amount.
29. Goods purchased 30,000, carriage paid on them 3,000.
30. Goods costing 1,000 given charity, 2,000 used by proprietor of his personal use, 2,000 distributed as free sample
