Accounting Basics

Journal Entries

Learning Outcome

What is a Journal Entry?

A journal entry is a formal record of a financial transaction in the books of accounts. It captures the effect of a transaction on two or more accounts using the debit-credit format, based on the applicable Golden Rule.

Each journal entry must contain the following five elements:

1. Date: The date on which the transaction takes place.

2. Account Debited: The account that receives the benefit or records an increase.

3. Account Credited: The account that gives the benefit or records a decrease.

4. Amount: The monetary value of the transaction (same for Dr. and Cr.).

5. Narration: A brief description explaining the nature of the transaction.

Standard Journal Entry Format

A journal entry is recorded in the following standard format in the Journal Book:

When a transaction involves more than two accounts, it is recorded as a Compound Journal Entry — one entry that combines multiple debits and/or credits into a single record.

Example: Goods worth ₹30,000 purchased; paid ₹10,000 in cash and balance on credit.

Step-by-Step: How to Pass a Journal Entry

Quick Reference: Common Transactions

Core Concepts (.....Slide N-3)

Summary

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Which platform is mainly used for professional networking and B2B marketing ?

Which platform is mainly used for professional networking and B2B marketing ?