Accounting

Journal entries-double entry system for beginners

Journal entries is the first step of accounting system, In this article you will learn “how to make journal entries in double entry system.

So let’s move for problem 1

Journal entries

Problem 1

  1. Naveen purchase bike for 4000 for business use.
  2. Purchase goods for cash 4000.
  3. Make credit sales to Mr Mobeen for 1000.
  4. Sold goods for 1000 on cash.
  5. Pay rent for 1000.
  6. Invest cash 5000 in business.

Make the journal entries for given transaction.

Solution

  1. Bike debit 4000 and cash credit 4000 (cash is not mentioned here but we use it because if nothing is mentioned in purchasing transaction then it means whether transaction take place on cash or bank).
  2. Goods debit for 4000 and cash credit by 4000.
  3. A/R debit by 1000 and sales credit1000.
  4. Cash debit 1000 and sales credit 1000.
  5. Rent expense 1000 debit and cash 1000 credit.
  6. Cash debit 5000 and capital credit 5000.

Problem 2

  1. Naveen started his business with 10000 cash and introduced equipment worth of 50000 in his business.
  2. Purchase car on credit for 20000.
  3. Purchase material for business on cash 2000.
  4. Payable of wages of 5000.
  5. Paid electricity bill of 1000.
  6. Make sales of 3000 on cash.
  7. Sold goods for 5000 and received 3000 cash.
  8. Make sales of 3000 and cash sales of 2000.

Make journal entries.

Solution

  1. Cash debit 10000, equipment debit 50000 and capital credit for 60000. (10000+50000=60000)
  2. Car debit 20000 and A/P credit for 20000.
  3. Material debit 2000 and cash 2000 credit.
  4. Unpaid wages debit by 5000 and A/P credit by 5000.
  5. Electricity expense 1000 and cash credit 1000.
  6. Cash debit 3000 and sales credit for 3000.
  7. Cash debit 3000, A/R debit 2000 and sales credit for 5000.
  8. A/R 3000, Cash debit 2000 and sales credit by 5000.

Problem 3

  1. Bank overdraft 5000.
  2. Start business with building of 500000.
  3. Paid bank overdraft bank.
  4. Make Purchase of 50000 on credit.
  5. Make sales of 60000 on cash.
  6. Paid wages of 10000.
  7. Took loan from bank of 100000.
  8. Purchase furniture for 20000 on cash.
  9. Make sales of furniture on credit for 30000.
  10. Purchase mobile for 5000.

Make journal entries.

  1. Bank debit for 5000 and A/P credit by 5000.
  2. Building debit 500000 and capital credit 500000.
  3. A/P debit by 5000 and bank credit 5000.
  4. Purchase debit 50000 and A/P credit 50000.
  5. Cash debit 60000 and sales credit 60000.
  6. Wages expense 60000 and cash credit 10000.
  7. Bank debit 100000 and A/P credit by 100000.
  8. Furniture debit 20000 and cash credit 20000.
  9. A/R debit 30000 and sales credit 30000.
  10. Mobile debit 5000 and cash credit 5000.

Problem 4

  1. Start business with bank loan of 100000.
  2. Introduced car of worth 100000 in his business.
  3. Make a purchase of new car worth 50000.
  4. Purchase goods on credit for 50000.
  5. purchase goods of 10000 and paid by check.
  6. Make sales of 2000 on credit and give discount to customer of 20%.
  7. Make sales on cash for 5000 and give discount of 10%.
  8. Purchase goods of 100000 on cash and received 10% discount by supplier.
  9. Make credit sales of 10000.
  10. Purchase new mobile of 20000.
  11. Withdrew of 5000 for personal use.
  12. Invest Cash of 100000 in business.
  13. Make purchase of 50000 on cash.
  14. Make sales of 50000 and cash sales of 20000.
  15. Received 50000 cash by a credit customer.

Solution

  1. Bank debit 100000 and capital credit for 100000.
  2. Car debit 100000 and capital credit by 100000.
  3. Car debit 50000 and cash credit by 50000.
  4. Purchase debit 50000 and A/P credit by 50000.
  5. Purchase debit 10000 and ban credit by 10000.
  6. A/R debit 1800, Discount debit 200 and sales credit by 2000.
  7. Cash debit 4500, discount debit 500 and sales credit by 5000.
  8. Goods debit by 100000, Cash credit 90000 and discount received credit 10000. (90000+10000=100000.
  9. A/R debit 10000 and sales credit by 10000.
  10. Mobile debit by 20000 and cash credit by 20000.
  11. Withdrew debit 5000 and cash credit 5000.
  12. Cash debit by 100000 and capital credit 100000.
  13. Purchase debit 50000 and cash credit by 50000.
  14. Cash debit 20000, A/R debit 50000 and sales credit by 70000. (20000+50000=70000).
  15. Cash debit by 50000 and A/R credit by 50000.

Problem 5 credit entries

  1. Purchase goods for credit 5000.
  2. purchase car on credit for 100000.
  3. Make purchase of bike by credit of 50000.
  4. Credit sale of 10000.
  5. sales on credit of 5000.

Solution

  1. Purchase debit 5000 A/P credit by 5000.
  2. Car debit 100000 A/P 100000 credit.
  3. Bike debit 50000 and 50000 A/P credit.
  4. A/R 10000 and sales credit 10000.
  5. A/R 5000 and credit sales of 5000.

Problem 7 Debit entries

  1. Purchase on cash 4000.
  2. Purchase goods of 3000 and paid by check.
  3. Paid utilities bill of 5000 by cash.
  4. Paid wages of 4000 by check.
  5. Liabilities of 5000 paid by check.

Solution

  1. Purchase debit 4000 and cash credit 4000.
  2. Purchase debit 3000 and bank credit by 3000.
  3. Utilities bill expense debit 5000 and cash credit 5000.
  4. Wages expense debit 4000 and bank credit by 4000.
  5. Liabilities debit by 5000 and bank credit by 5000.

Last problem of journal entries in this article.

Problem 8

  1. Sales of 5000 on credit and give 10% discount.
  2. 4500 received by check through a credit customer.
  3. Make a sales on cash for 2000 and received 1800 with discount settlement.
  4. Pay for service 5000(not yet paid).
  5. Paid of services by check 5000.
  6. Took loan form a supplier of 10000 by check.
  7. Make a sales for 2000 by cash.

Solution

  1. A/R debit 4500, discount debit 500 and sales credit by 5000.
  2. Bank debit 4500 and A/R credit by 4500.
  3. Cash debit 1800, discount debit 200 and sales credit of 2000.
  4. services debit 5000 and A/P credit by 5000.
  5. services debit 5000 and bank credit by 5000.
  6. Bank debit by 10000 and loan payable credit by 10000.
  7. Cash 2000 debit and sales credit by 2000.

Hope you like this article, this article may help you to clear your all problems related to double entries or journal entries.

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Naveen Rajput

8 Comments

    Nice examples and explanation, found very helpful thanks for such a kind explanation.

      Thank you for visiting here.

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