compound journal entry example

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An entry in a journal which contains more than one debit and once credit are necessary ,the entry is called compound journal entry. Or in other words an entry which affects more than two accounts is called compound journal entry.

A compound journal entry may have one debits and two or more credits or one credit and two or more debits. Instead of creating so many simple journal entry, you can create one compound journal entry for multiple transactions. Which will help us to reduce the work and  time.The following example will illustrate this point

Example of a compound journal entry

  1. March 31 : Paid Rent Rs 1000
  2. March 31 : Paid wages Rs 2500
  3. March 31 : Paid Salaries Rs 5000

Let’s record this transaction as compound journal entry

No Date Particulars Ledger Folio( LF ) Debit Amount Credit Amount
1 31/3/2016 Rent  A/c ………Dr 1000.00
Wages A/c …..Dr 2500.00
Salary  A/c ….Dr 5000.00
To; Cash 8500.00
(Rent,Wages.Salary Paid)

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