COMBINED OR COMPOUND ENTRY - Definition

COMBINED OR COMPOUND ENTRY

So far we have seen transactions which involve only two accounts. Some times, a transaction may involve more than two accounts.Some time , there may be more transaction of the same nature taking place on the same date.In such situations, such transaction may be recorded by means of single journal entry, Instead of passing separate  entries. Such an entry called “Combined”or “Composite”or Compound journal entry, It may be recorded in the following three ways

1 . By Debiting one account and crediting two or more accounts.

2   By Debiting two or more accounts and crediting one account.

3   By Debiting two or more accounts and crediting two or more accounts.

BANK RECONCILIATION STATEMENT-Meaning

Business man mostly keep a cash book with Bank column. This column shows balance at the bank.bank issues a pass book to the businessman.Who opens his account in it. The balance shown by 'bank' column of cash book and pass book must be same, bust mostly they differ due to various reasons.Therefore a statement is prepared to reconcile this difference.this statement called 'Bank Reconciliation Statement'.

GOLDEN RULES - WAY OF WORKING EXAMPLE

We can take the following transactions and mention which accounts are involved in each case and which of them is to be debited and credited

April 2 Bought goods from AJAY Rs 8000

10 Paid cash to AJAY Rs 5000

21 Sold goods to vikram Rs 3000

25 Received cash from vikram Rs 2000

30 Paid salaries to employees Rs 500

30 Received commission Rs 250

 In the following table, we show the accounts to be debited and credited in the case of each transaction.

Date of transaction	Account to be debited	Account to be credited	Type of account	Reason for debit or credit
Apr - 02	Goods A/c ...................	.................... Ajay A/c	Real Personal	Good come in Ajay is the giver
Apr - 10	Ajay A/c ...............	.................. Cash A/c	Personal Real	Ajay is the receiver. cash goes out
Apr - 21	Vikram A/c ..................	................. Goods A/c	Personal Real	Vikram is the receiver. Goods goes out
Apr - 25	Cash A/c .................	............... Vikram A/c	Real Personal	Cash comes in vikram is the giver
Apr - 30	Salaries A/c ..................	................. Cash A/c	Nominal Real	Expense Cash goes out
Apr - 30	Cash A/c ..................	................. Commission A/c	Real Nominal	Cash come in Income

QUIZ 1 BASIC ACCOUNTING CONCEPTS

http://www.daypo.net/test-basic-accounting-concept.html

CASH BOOK MEANING

Every business receives cash and pays cash practically every day, all the receipts and payment of cash are recorded in a separate book called the cash book.

In modern times cash includes not only legal tender money likes notes and coins but also other form of money like cheques, bank drafts etc.

The business man derives the following advantages by maintaining separate  cash book .

It shows owner how much he has received and how much he has paid.

It shows the owner how much money there should be left his cash box at any given time

it receives the owner of the trouble of counting his money whenever he wants to know how much money he has in hand.

SALES JOURNAL

SALES JOURNAL:

In this book are recorded all goods sold on credit. If there are cash sales they are recorded in cash book.

Sale of old assets is not recorded in this book.

Such transactions are passed through the journal proper

Invoice :

When goods are sold on credit.an invoice is given to the buyer, the seller generally has a bound invoice book.it contains consecutively numbered  invoices in duplicate. Original copy is given to the buyer and the duplicate remains in the book itself. The entries in the sales books are made with the help of the duplicate copies which are duly numbered.

DATE	NAME OF CUSTOMER	OUTWARD INVOICE	L.F	AMOUNT

1 The first column records the date of transaction

2 The second column sets out the name of the buyer and his address

3 Third column is written the number of the outward invoice number.

4 fourth column points out the page in the ledger where the buyer accounts is debited

5 The “ amount “ column specifies the net amount specified in the invoice.

POSTING :

The sales book is periodically totaled and the entries there from are posted to the ledger accounts under

Debit customers account with the individual amount against his name as To sales a/c with the date of sale

Credit sales account with the periodical total as By sundry debtors with the date when the book is totaled. is written the number of the outward invoice number.