In earlier article of Part1, we learned about the journal and its importance.
This Part 2 show us the technique of journalizing. When we do journalizing, there are normally two scenarios which might involve single entry or compound journal entry
Append below the illustration:
SINGLE ENTRY Of Journalizing:
Illustration:
On 23/2/07, Company XYZ bought an Office Equipment which cost $5,000 cash.
Solution:
GENERAL JOURNAL JV No.1
| Date |
Narration |
Ref/ Account Codes |
Dr |
Cr |
| 23/2/07 |
Office Equipment |
1450 |
5,000 |
|
| Bank Account |
1100 |
5,000 |
||
| Being purchase of Office equipment |
COMPOUND ENTRY: More than two accounts in journalizing
Illustration:
Dec 1 Invested $7,000 cash in the business
10 Bought office equipment for $5,000 paid $3,000 in cash and balance on account
15 Paid $1,000 cash on balance owed to equipment vendor
29 Withdrew $1,000 cash for personal use.
The Company chart of accounts shows:
1000 Bank
1100 Equipment
2000 Accounts Payable
3000 Proprietor, Capital
3100 Proprietor, Drawing
Solution:
GENERAL JOURNAL JV NO: 3
|
Date |
Narration |
Ref/ Account Code |
Dr |
Cr |
|
1/12/06 |
Bank |
1000 |
7,000 |
|
|
Owner,Capital |
3000 |
7,000 |
||
|
Being record of owner’s investment of cash in business |
||||
|
10/12/06 |
Office Equipment |
1100 |
5,000 |
|
| Bank |
1000 |
3,000 |
||
| Accounts Payable |
2000 |
2,000 |
||
|
Being purchase of office equipment partly on cash and on credit |
||||
|
15/12/06 |
Accounts Payable |
2000 |
1,000 |
|
|
Bank |
1000 |
1,000 |
||
|
Being part settlement of office equipment supplier account |
||||
|
29/12/06 |
Owner,Drawing A/c |
3100 |
1,000 |
|
|
Bank |
1000 |
1,000 |
||
|
Being owner’s drawing of cash for personal use. |
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