Amity Business School

Journal
Journal is that primary book of accounts in which
transactions are originally recorded in a chronological order.
It is also called the Books of Original Entry.
The
Journal as originally used, is a book of prime entry in which
transactions are copied in order of date from a
memorandum or waste book. The entries as they copied
are classified into debits and credits, so as to facilitates
their being correctly posted, afterwards in the ledger

- Prof.

Amity Business School

PROFORMA OF JOURNAL
Date

Particulars

Ledger
Folio

Amount Dr. Amount Cr.

(in Rs.)
(in Rs.)

Narration

Amity Business School

SOURCE DOCUMENTS
Documents on the basis of which entries are recorded in
the books of accounts are named as source
documents. The following are the most common source
documents:
Cash Memo
Invoice
or Bill
Receipt
Debit
Note
Credit Note
Pay-inSlip
Cheque
Vouchers
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Amity Business School

Numerical
Enter the following transactions in the Journal of Akshay
2009
Rs.
July 1 Akshay started business with cash
60, 000
2 Purchased goods for cash
25, 000
4 Purchased goods from Anil
10, 000
5 Purchased furniture for cash
5, 000
7 Sold goods for cash
12, 000
9 Sold goods to Sachin
15, 000
10 Paid cash to Anil
7, 000
12 Received cash from Sachin
10, 000
16 Purchased goods from Ravi for cash
7, 500
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18 Sold goods to Suresh for Cash

19 Sold goods to Suresh
20 Bought Machinery for Cash
27 Paid Rent
29 Paid Wages
30 Paid salary
30 Received Commission

12, 600
7, 000
8, 000
400
450
1, 200
200

Amity Business School

SPECIAL ENTRIES

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Amity Business School

Amity Business School

Amity Business School

Discount
Discount is of two types:
Trade Discount: Discount allowed by a supplier from
the list price of the goods or services on business
considerations (such as quantity bought, trade practices)
other than prompt payment. No separate entry is
passed for the trade discount, as it is deducted
from the cash memo or invoice of goods.
Cash Discount: This discount is allowed to customers
for making prompt payment. As the discount is allowed
at the time of making payment, so the entry for cash
discount is recorded along with the entry for payment.
Discount is a nominal account and an expense to
the company, hence debited.
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