Types of transaction Effects on transaction Journal Entries Narration

Cash Purchase of Purchase a/c & Cash Purchase a/c.............Dr. Being goods purchased
Goods a/c To cash a/c on Cash
Started business Cash a/c & Capital a/c Cash a/c...........Dr. Being business started
To capital a/c with cash
Cash sales of goods Cash a/c & Sales a/c Cash a/c ..........Dr. Being goods sales for
To Sales a/c cash
Credit Sales of goods Debtor’s a/c & Sales Debtor’s a/c.......Dr. Being goods sold on
a/c To sales a/c credit
Sales return of goods Sales return a/c & Sales a/c..........Dr. Being goods returned
Debtor’s a/c To Debtor’s a/c by Debtor’s
Credit purchase of Purchase a/c & Purchase.........Dr. Being goods purchased
goods Creditors a/c To Creditor’s a/c on Credit
Purchase return good Creditor’s a/c & Creditors a/c........Dr. Being goods return to
of goods Purchase Return a/c To Purchase return a/c Creditors
Receipt of cash on Cash a/c & person/ Creditor a/c............Dr. Being amount received
account organization a/c To person/ org a/c from person/ org
Payment of expenses Expenses a/c & Cash Expenses a/c...............Dr. Being expenses paid
a/c To Cash a/c
Cash withdrawl for Drawing a/c & Cash Drawing a/c..........Dr. Being cash withdrawn
personal use a/c To Cash a/c for personal use
Goods withdrawn for Drawing a/c & Drawing a/c.............Dr. Being goods withdrawn
personal use by owner Purchase a/c To Purchase a/c for personal use
Deposite Cash into Bank a/c & Cash a/c Bank a/c...........Dr. Being cash deposite
Bank To Cash a/c into Bank
Dishonour of cheque Name of Party a/c & Name of Party a/c.....Dr. Being Name of person’s
Bank a/c To Cash a/c cheque returned cheque
Payment by cheque Name of Party’s a/c & Name of Party’s a/c.....Dr. Being amount paid by
Bank a/c To Bank a/c cheque
Cash withdrawn from Cash a/c & Bank a/c Cash a/c ............Dr. Being cash withdrawn
Bank for office To Bank from Bank for office use
Cash withdrawn from Drawing a/c & Bank Drawing a/c........Dr. Being cash withdrawn
Bank for office use a/c To Bank from Bank for Personal
use
Payment of expenses Expenses a/c & Bank Expenses a/c........Dr. Being expenses paid by
by Cheque a/c To Bank a/c Cheque
Bank charges charged Bank charges a/c & Bank charges ......Dr. Being bank charged for
by Bank Bank a/c To Bank a/c its services
Cash or goods given as Charity a/c & Purchase Charity a/c..........Dr. Beings goods as Charity
charity a/c To purchase a/c
Goods distributed as Free sample a/c & Free Sample a/c.......Dr. Being goods given as
free Samples Purchase a/c To purchase a/c Charity