Journal entry is the first step of the accounting cycle where all the accounting transactions are analyzed and recorded as the journal entries and example of which includes the purchase of machinery by the country where machinery account will be debited and the cash account will be credited.
Examples of Journal Entry in Accounting
The following journal entry examples in accounting provide an understanding of the most common type of journal entries used by the business enterprises in their day to day financial transactions. Passing the journal entries is very much required as they allow the business organization to sort their transactions into manageable data. It is basically the summary of debits and credits of financial transactions with a note of which accounts these financial transactions will affect maintained in the chronological order.
Journal Entry Accounting Example #1
Pen World Ltd. has the following transactions during the month of Feb-2019. Pass the necessary Journal Entry.
On Feb 4, 2019, Purchased material worth $50,000.
On Feb 10, 2019, Sold Pens worth $80,000
On Feb 28, 2019, Incurred Expenses worth $5,000
On Feb 28, 2019, Purchased furniture worth $7,000
Journal Entry Accounting Example #2
Following are the transactions of Fun Ltd. Record the transaction in Journal.
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Journal Entry Example #3
Small Finance International Ltd was incorporated on April 2019 with the capital initially of 10,000 common stock of $ 10 each. During the first month of its operating company had the following transactions. Record the journal entries of all the transactions.
Journal Entry Example #4
Different purchases related transactions in Company Material Ltd. are given below. Record the journal entry for each transaction.
On 05- Mar- 19 goods purchased worth $5,000
On 07-Mar-19 Goods worth $500 lost by fire.
On 10-Mar-19 Goods worth $900 lost by theft.
On 15-Mar-19 Goods worth $700 distributed as a charity.
On 20-Mar-19 Goods worth $600 owner withdrew.
The business enterprise will be benefited in many ways by passing journal entries. Firstly it can get at one place the entire effect of any transactions. Secondly, it provides records of transaction in chronological order helping and easing out to locate any transaction based on their date. Thirdly it helps in mitigating the reason of the errors being the debit and credit of individual as well as total transactions can be easily compared. Moreover, any entries which are not going into any of the books maintained by the company have to be recorded in the journal itself.
Journal Entry Examples Video
This has been a guide to Journal Entry Examples. Here we discuss the top 4 examples of journal entries in accounting used by business enterprises. You can learn more about accounting from the following articles –