Journal Entries

Refresher on

Debits
Credits
Accounts
Assets
Assets are properties or possessions. They include cash, machines, furniture,
building, debtors and other things.

Assets are sometimes defined as resources or things of value that are

owned by a company.
 Journal Entries
Income is money that an individual or business receives in
exchange for providing a good or service or through investing
capital

Income is the revenue a business earns

from selling its goods and services

Money spent or cost incurred in an organization's efforts to generate revenue,

representing the cost of doing business.
Expenses may be in the form of actual cash payments (such as wages and
salaries), a computed expired portion (depreciation) of an asset, or an amount
taken out of earnings (such as bad debts). Expenses are summarized and
charged in the income statement as deductions from the income before
assessing income tax. Whereas all expenses are costs, not all costs (such as
those incurred in acquisition of income generating assets) are expenses.
June 2014 1: Business started by Shiva & vishnu with Rs 50,000/- & 70,000/-
Cash and Credit Transactions
On March 10th, A sold goods to B Rs 800/-
Trade Discount and Cash Discount

Trade discount is not recorded in the books and entry is made with
the list price less trade discount. However, cash discount is
debited/credited with the cash receipts/payments.

The following journal entries shall be passed:

(Trade discount and cash discount) Journalision the following transaction
ILLUSTRATION 4. (Sale through Credit/Debit card)
ILLUSTRATIOIN 5. (Miscellaneous Expenses) Paid Rs. 300 for
Subscribing newspapers and magazines. Journalise
Sale through Credit/Debit Card

Today, Credit/Debit Cards are being issued by almost every

bank in India. Banks issue such cards directly or with the
collaboration of some other agencies. Some of the popular
cards are SBI Card, ICICI Bank Card, HSBC Card etc. Sale
through these cards is equivalent to cash sale and
commission charged by the bank is treated as selling
expenses
(VI) Prepaid Expenses:

Prepaid expenses are those expenses which have been paid during
an accounting year but benefit of which will be received during next
year(s). Based on matching concept, expenses for the current year
should only be shown in the income statement.
The following journal entries shall be passed:

http://www.yourarticlelibrary.com/accounting/journal/business-
transactions-in-journal-entries/63242/