Scribd
Upload
9 views

Journal Ppt

The document provides a detailed explanation of the Journal in accounting, describing it as the primary book where all transactions are first recorded in chronological order. It outlines the format of a journal, the process of journalizing transactions, and the handling of returns and discounts. Additionally, it includes examples of journal entries for various transactions, illustrating the recording of capital, purchases, sales, and discounts allowed or received.

Uploaded by

tammynair2020
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
9 views

Journal Ppt

The document provides a detailed explanation of the Journal in accounting, describing it as the primary book where all transactions are first recorded in chronological order. It outlines the format of a journal, the process of journalizing transactions, and the handling of returns and discounts. Additionally, it includes examples of journal entries for various transactions, illustrating the recording of capital, purchases, sales, and discounts allowed or received.

Uploaded by

tammynair2020
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 16

Journal chapter 8

BOOK OF FIRST ENTRY


- BOOK OF ORIGINAL ENTRY
- BOOK OF PRIME ENTRY
JOURNAL DEFINITION

• Journal is a Day Book where all the transactions are FIRST recorded,in chronologiacal order.
Therefore Journal is also known as ,Book of Prime Entry,Book of Original Entry or Book of
First Entry.
• Transactions are recorded in the Journal from source documents & Accounting vouchers.
From the Journal , entries are posted to the Ledger accounts.
• --Journal performs the Recording Function of Accounting
• The word “Journal” has been derived from the French word “Jour” which means a 'Day'.
Since all transactions are recorded in the Journal ,daily, Journal is also known as “DAY BOOK”
Format of JOURNAL
DATE PARTICULARS L/F Dr AMOUNT Cr AMOUNT

(1) (2) (3) (4) (5)

27/04/2025 3
FORMAT ….
• A journal has got 5 columns namely, Date, Particulars, Ledger Folio,
Debit Amount and Credit amount
• Narration:- Narration is a brief description of every transaction,
written in the Journal .
Journalise the following transactions
in the books of Rahul
• 2023 Jan 1 Rahul started a textile shop with capital Rs.10
lakhs---
• Jan 2. he opened a bank a/c and deposited Rs.3 lakhs
• Jan 3 Furnished the show room spending Rs.100000/- paid in
cash
• Jan 4. Bought clothes Rs.200000/- by cheque
• Jan 5. Sold 5 sarees @ Rs. 2000/- each .
RAHUL’S JOURNAL
DATE PARTICULARS L/F DEBIT CREDIT
(Amount) (Amount)

2023 Cash a/c ……. Dr 10,00,000


Jan -1 To Rahul’s Capital 10,00,000
(Being Rahul commenced textile
business with cash) )
‘’ ‘’ – 2 Bank a/c…….. Dr 300000
To Cash a/c 300000
(Being deposited cash into bank)
‘’ - 3 Furniture a/c 100000
To Cash a/c 100000
(Being furnished the show room and
paid cash)
--------------------------------------------
‘’ ‘’ – 4 Purchases a/c Dr 200000
200000
To Bank a/c
(Being purchased clothes by cheque)
------------------------------------------
‘’’’ -5 Cash A/c Dr 10000
To sales A/c 10000
(Being sold 5 sarees @ Rs.2000/-
each for Cash)
RETURN OF GOODS
• If purchased goods/ sold goods are defective/damaged ,it may be returned to the
supplier/seller . Return of goods can be classified into two namely—
• 1.Purchases Returns 2. Sales Returns
• (1) Purchases Returns:- When purchased goods are returned to the supplier ,it is called
Purchases Returns OR Returns Outwards. When Purchases Returns are made, we
prepare a DEBIT NOTE and send to the supplier to indicate that his account is DEBITED
for the amount of returned goods.
• Journal entry:-
• Supplier’s/Creditor’s a/c Dr
• To Purchases Returns/Returns Outwards
• (Being goods returned to…..)
2. SALES RETURNS
• When sold goods are returned by our customers ,it is known as Sales Returns/ Returns
Inwards.When sales Returns are made, we prepare CREDIT NOTE and sent to the
customer/Debtor.
• JE : Sales Returns a/c Dr
• To Customer’s/Debtor’s a/c
• (Being the entry for sales returns)
• DEBIT NOTE & CREDIT NOTE
• DEBIT NOTE:- Debit note is a non cash voucher prepared and sent to the
Creditor indicating that the party’s account is Debited for the amount of purchases
returns/allowances/discounts etc made.
• CREDIT NOTE:- is a non cash voucher prepared and sent to the Debtor to indicate the
amount of credit allowed to the party for the sales returns/allowances/discounts etc
Discount
DISCOUNT
• Discount is a reduction in the selling price /invoice price allowed by the
seller to the buyer.
• Discount can be divided into two –namely Trade Discount & Cash Discount.
• 1.Trade Discount:- Trade discount is a discount allowed from the marked
price before the Invoice/Bill is prepared.
• * The objective of allowing Trade Discount is to promote/increase the
quantity of sales.
• * * Trade discount will not be accounted in the books as it is allowed
before the sale is made/Invoice is prepared.

• JE:- NO ENTRY
CASH DISCOUNT
CASH DISCOUNT
• Cash discount is a discount allowed to the Debtors for making
early and prompt payment.
• It is allowed after the sale is made /invoice is prepared.
• Hence it should be accounted in the books of account.
• Cash discount can be classified into two:-
• 1. Discount Allowed
• 2.Discount Received
• 1.Discount Allowed :- It is a cash discount allowed by us to our
debtors ,when payment is received promptly. The purpose of
allowing this discount is to encourage early and prompt payment.
Discount allowed is a loss/expense to the business ,and hence,it
should be debited in the books.
2.Discount Received
• Discount received is a cash discount received from our creditors at the
time of making payment to them. This is to encourage early and
prompt payment.
• Discount received is a gain for the business and hence CREDITED in
the books.
JE for cash received and discount
allowed
RECEIVED CASH RS.9900 FROM Hari in full settlement
1.when cash is received from the Debtor :- of his account Rs.10000/- ---rs.100 is cash discount
Cash a/c Dr ….9900 CASH A/C Dr 9900
To Debtor/Party’s a/c 9900 DISCOUNT Dr 100
2.For Discount allowed:- To Hari account 10000
Discount Allowed a/c Dr 100
To Debtor’s/Party’s a/c 100
(1+2) Compound journal entry:-
Cash a/c Dr……. 9900
Discount Allowed a/c Dr 100
To Debtor’s A/c 10000
( Being cash received from……(debtor) and discount
allowed)
Journal Entry for Cash paid and discount
received
• 1.When cash is paid to a Creditor .
• Creditor’s a/c Dr ….. 900
• To Cash 900
• (Being cash paid to ----creditor)
• 2. For discount received:-
• Creditor’s a/c …Dr (with the amount of discount) 100
• To Discount Received 100
• (Being the amount of discount received is credited)
• COMPOUND ENTRY (1+2)
• Creditors a/c Dr …..(900+100 ) 1000
• To Cash 900
• To Discount received 100
• (Being cash paid and discount received)
• Question .1
• 2020 Sept 1 Sold goods to Avinash on credit Rs.20000/-(One month credit)
Sep 2 Bought goods from Jayaram on credit Rs.15000/-(15 days credit)
Sept: 14. Received cash from Avinash Rs. 19900 and allowed a discount of Rs.100/-
Sept 15 Paid cash to Jayaram Rs.14950/- in full settlement of his account.
WRITE JOURNAL ENTRIES

You might also like