Journal Entry Full Course | Rules of Debit and Credit | One Shot Journal Entry in Hindi | Accounting

Introduction

A journal is the first book of entry where all transactions are recorded in **chronological order. The process of recording these transactions is called journalization, and each entry made is called a journal entry.

This blog covers all the 54 key journal entries systematically, along with the rules of debit and credit.—

Traditional or Golden Rules:
1. Real Accounts: Debit what comes in, Credit what goes out.
2. Personal Accounts: Debit the receiver, Credit the giver.
3. Nominal Accounts: Debit all expenses and losses, Credit all incomes and gains.

Modern Rules:
1. Assets: Debit when increased, Credit when decreased.
2. Liabilities: Debit when decreased, Credit when increased.
3. Capital: Debit when decreased, Credit when increased.
4. Revenue: Debit when decreased, Credit when increased.
5. Expenses: Debit when increased, Credit when decreased.

Complete List of Journal Entries (Chronologically Ordered)

1. Commencement of Business – 
Cash A/c Dr.
To Capital A/c Cr.
– Explanation: Cash (asset) increases, and capital increases.

2. Cash Purchase of Goods- 
Purchases A/c Dr.
To Cash A/c Cr.
– Explanation: Purchases (expenses) increase, and cash decreases.

3. Credit Purchase of Goods –
Purchases A/c Dr.
To Suppliers A/c Cr.
– Explanation: Purchases increase, and liability to suppliers increases.

4. Cash Sales – Entry:
Cash A/c Dr.
To Sales A/c Cr.
– Explanation: Cash increases, and sales (revenue) increase.

5. Credit Sales- Entry:
Debtors A/c Dr.
To Sales A/c Cr.
– Explanation: Debtors (assets) increase, and sales (revenue) increase.

6. Purchase Return – Entry:
Suppliers A/c Dr.
To Purchase Return A/c Cr.
– Explanation: Liability decreases, and expenses (purchase return) decrease.

7. Sales Return
Sales Return A/c Dr.
To Debtors A/c Cr.
– Explanation: Revenue decreases, and debtors (assets) decrease.

8. Purchase of Assets
Assets A/c Dr.
To Cash A/c Cr.
– Explanation: Assets increase, and cash decreases.

9. Sale of Assets
Cash A/c Dr.
To Assets A/c Cr.
– Explanation: Cash increases, and assets decrease.

10.Payment of Expenses
Expenses A/c Dr.
To Cash A/c Cr.
– Explanation: Expenses increase, and cash decreases.

11. Receipt of Income
Cash A/c Dr.
To Income A/c Cr.
– Explanation: Cash increases, and revenue increases.

12. Collection from Debtors (Discount Allowed
Cash A/c Dr.
Discount A/c Dr.
To Debtors A/c Cr.
– Explanation: Cash increases, discount allowed increases, and debtors decrease.

13. Payment to Creditors (Discount Received)
Creditors A/c Dr.
To Cash A/c Cr.
To Discount A/c Cr.
– Explanation: Creditors (liabilities) decrease, cash decreases, and discount received increases.

14. Depreciation on Assets
Depreciation A/c Dr.
To Assets A/c Cr.
– Explanation: Depreciation (expense) increases, and asset value decreases.

15. Interest on Capital
Interest on Capital A/c Dr.
To Capital A/c Cr.
– Explanation: Expense increases, and capital increases.

16. Outstanding Expenses
Expenses A/c Dr.
To Outstanding Expenses A/c Cr.
– Explanation: Expenses increase, and liability increases.

17. Prepaid Expenses
Prepaid Expenses A/c Dr.
To Expenses A/c Cr.
Explanation: Asset (prepaid) increases, and expenses decrease.

18. Withdrawal of Cash for Personal Use
Drawings A/c Dr.
To Cash A/c Cr.
– Explanation: Drawings increase, and cash decreases.

19. Withdrawal of Goods for Personal Use
Drawings A/c Dr.
To Purchases A/c Cr.

20. Goods Given as Charity
Charity A/c Dr.
To Purchases A/c Cr.
– Explanation: Charity (expense) increases, and purchases (expense) decrease.

21. Insolvency of Debtors
Cash A/c Dr.
Bad Debts A/c Dr.
To Debtors A/c Cr.
– Explanation: Cash increases, bad debts (expense) increase, and debtors decrease.

22. Bad Debts Recovered
Cash A/c Dr.
To Bad Debts Recovered A/c Cr.
– Explanation: Cash increases, and bad debts recovered (income) increases.

23.Distribution of Goods as Free Samples
Advertising A/c Dr.
To Purchases A/c Cr.
– Explanation: Advertising (expense) increases, and purchases decrease.

24. Loss of Goods by Theft or Fire
Loss by Theft A/c Dr.
To Purchases A/c Cr.
– Explanation: Loss (expense) increases, and purchases decrease.

25.Loss of Cash by Theft or Fire
Loss by Theft A/c Dr.
To Cash A/c Cr.
– Explanation: Loss (expense) increases, and cash decreases.

26. Income Tax Paid
Capital A/c Dr.
To Bank/Cash A/c Cr.
– Explanation: Capital decreases, and bank/cash decreases.

27. Refund of Income Tax
Cash A/c Dr.
To Capital A/c Cr.
– Explanation: Cash increases, and capital increases.

28. Interest Received on Income Tax Surplus
Cash A/c Dr.
To Capital A/c Cr.
– Explanation: Cash increases, and capital increases.

29. Bills Drawn
Bills Receivable A/c Dr.
To Drawer’s A/c Cr.
– Explanation: Bills Receivable (asset) increases, and drawer’s account increases.

30. Bills Accepted
Drawer’s A/c Dr.
To Bills Payable A/c Cr.
– Explanation: Drawer’s account (liability) increases, and bills payable (liability) increases.

31. Payment of Bills Received
Cash A/c Dr.
To Bills Receivable A/c Cr.
– Explanation: Cash increases, and bills receivable (asset) decreases.

32. Payment of Bills Made
Bills Payable A/c Dr.
To Cash A/c Cr.
– Explanation: Bills payable (liability) decreases, and cash decreases.

33. Bills Receivable Dishonoured
Drawee’s A/c Dr.
To Bills Receivable A/c Cr.
– Explanation: Drawee’s account increases, and bills receivable (asset) decreases.

34. Bills Payable Dishonoured
Bills Payable A/c Dr.
To Drawer’s A/c Cr.
– Explanation: Bills payable (liability) decreases, and drawer’s account increases.

35. Sale of Assets for More Than the Book Value
Cash A/c Dr.
To Assets A/c Cr.
To Profit on Sale of Assets A/c Cr.
– Explanation: Cash increases, asset decreases, and profit (income) increases.

36. Sale of Assets for Less Than the Book Value
Cash A/c Dr.
Loss on Sale of Assets A/c Dr.
To Assets A/c Cr.
– Explanation: Cash increases, loss (expense) increases, and asset decreases.

37.Amount Deposited Into Bank
Bank A/c Dr.
To Cash A/c Cr.
– Explanation: Bank balance increases, and cash decreases.

38. Amount Withdrawn from Bank
Cash A/c Dr.
To Bank A/c Cr.
– Explanation: Cash increases, and bank balance decreases.

39. Cheque Received and Retained
Cash A/c Dr.
To Debtors A/c Cr.
– Explanation: Cash increases, and debtors decrease.

40. Cheque Received Previously Deposited into Bank
Bank A/c Dr.
To Cash A/c Cr.
– Explanation: Bank balance increases, and cash decreases.

41. Cheque Received Previously Endorsed and Credited
Endorsee A/c Dr.
To Cash A/c Cr.
– Explanation: Endorsee account increases, and cash decreases.

42. Cheque Received and Deposited into Bank
Bank A/c Dr.
To Debtors A/c Cr.
– Explanation: Bank balance increases, and debtors decrease.

43. Cheque Issued
Creditors A/c Dr.
To Bank A/c Cr.
– Explanation: Creditors (liabilities) decrease, and bank balance decreases.

44. **Interest Allowed or Credited by Bank**
Bank A/c Dr.
To Interest A/c Cr.
– Explanation: Bank balance increases, and interest (income) increases.

45. Bank Charges or Collection Charges
Bank Charges A/c Dr.
To Bank A/c Cr.
– Explanation: Bank charges (expenses) increase, and bank balance decreases.

46. Dishonour of Cheque Discounted Earlier
Drawee’s A/c Dr.
To Bank A/c Cr.
– Explanation: Drawee’s account increases, and bank balance decreases.

47. Sale of Waste or Scrap
Cash A/c Dr.
To Miscellaneous Receipt A/c Cr.
– Explanation: Cash increases, and miscellaneous income increases.

48. Subscribing to Newspapers
Miscellaneous Expenses A/c Dr.
To Cash A/c Cr.
– Explanation: Miscellaneous expenses increase, and cash decreases.

49. Treatment of GST on Sales
Cash A/c Dr.
To Sales A/c Cr.
To GST A/c Cr.
– Explanation: Cash increases, sales (revenue) increases, and GST liability increases.

50. Payment of GST Collected
GST Collected A/c Dr.
To Cash A/c Cr.
Explanation: GST liability decreases, and cash decreases.

51. GST Paid on Purchase
Purchases A/c Dr.
GST Paid A/c Dr.
To Cash/Bank A/c Cr.
Explanation: Purchases increase, GST paid increases, and cash decreases.

52. GST Collected on Sales
Cash/Bank/Debtors Dr.
To Sales A/c Cr.
To GST Collected A/c Cr.
– Explanation: Cash increases, sales (revenue) increases, and GST collected liability increases.

53. Payment of GST Collected
-GST Collected A/c Dr.
To Cash/Bank A/c Cr.
– Explanation: GST liability decreases, and cash decreases.

54. Receipt of Value Payable Post (VPP)
Purchases A/c Dr.
To Cash A/c Cr.
– Explanation: Purchases (expenses) increase, and cash decreases.

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Conclusion
This comprehensive list of  54 journal entries provides you with a clear understanding of the  rules of debit and credit in various scenarios, from basic transactions to more advanced ones involving GST, discounts, and the dishonoring of cheques. These entries are fundamental for anyone learning accounting and looking to master journalization as the first step in preparing accurate financial statements.