Journal Entry Examples

Top 10 Examples of Journal Entry

Example of jounal entry includes the purchase of machinery by the country where machinery account will be debited and the cash account will be credited.

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 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


Example #1 – Revenue

Sales Journal Entry:

When sales are made on credit, journal entry for accounts receivableJournal Entry For Accounts ReceivableAccount receivable is the amount the company owes from the customer for selling its goods or services. The journal entry to record such credit sales of goods and services is passed by debiting the accounts receivable account with the corresponding credit to the sales more is debited, and sales account is credited.

Journal Example 1

If cash sales happen, then the cash account is debited.

Allowance for Doubtful Accounts Entry:

At times customers are unable to pay. For such scenarios, setting up or adjustment for bad debt expenseBad Debt ExpenseBad Debts can be described as unforeseen loss incurred by a business organization on account of non-fulfillment of agreed terms and conditions on account of sale of goods or services or repayment of any loan or other more is made. For such entry, bad debt expense is debited, and allowance for doubtful accounts is credited.

Allowance for Doubtful Accounts 1.1

If in case such provisions are found, the doubtful accounts are debited and account receivableAccount ReceivableAccounts receivables refer to the amount due on the customers for the credit sales of the products or services made by the company to them. It appears as a current asset in the corporate balance more is credited.

Example #2 – Expense

Journal Entry for Accounts Payable:

In this case, the related asset or expense account is debited, and the journal entry for the payable accountJournal Entry For The Payable AccountAccounts Payable Journal Entries refers to the amount payable accounting entries to the creditors of the company for the purchase of goods or services and are reported under the head current liabilities on the balance sheet and this account debited whenever any payment is been more is credited.

Journal Example 2

When payment is to account payable, accounts payable is debited, and cash account is credited.

Account payable 2.1

Journal Entry for Payroll:

In the case of payroll expenses, the wages expense, these accounts are debited, and the cash account is credited.

Journal Example 2.2

Journal Entry for Accrued Expense:

In this case, the applicable expense is debited, and accrued expenseAccrued ExpenseAn accrued expense is the expenses which is incurred by the company over one accounting period but not paid in the same accounting period. In the books of accounts it is recorded in a way that the expense account is debited and the accrued expense account is more is credited.

Journal Entry for Depreciation:

For depreciation expense, depreciation expense is debited, and the accumulated depreciationAccumulated DepreciationThe accumulated depreciation of an asset is the amount of cumulative depreciation charged on the asset from its purchase date until the reporting date. It is a contra-account, the difference between the asset's purchase price and its carrying value on the balance more account is credited.

Depreciation Expense 2.3

Petty Cash Journal Entry:

To establish a petty cashPetty CashPetty cash means the small amount that is allocated for the purpose of day to day operations. It is unreasonable to issue a check for such small expenses and for managing the same custodians are appointed by the more fund, petty cash is debited, and the cash account is credited.

Journal Example 2.4

Example #3 – Asset

Cash Reconciliation Entry:

There is usually a debt to the bank fees account, Office Supplies Account, Interest Account, etc. to recognize charges made by the bank, with a credit to the cash account.

Cash Reconciliation 3

Journal Entry for Prepaid Expense Adjustment:

In this case, the expense account debits, and the prepaid expense account credits.

Purchased Inventory Journal Entry:

If the inventory purchased worth $90000, $10000 in cash, and $80000 on the account;

Journal Example 3.1

Journal Entry for the Fixed Asset:

When a fixed asset is added, the applicable fixed asset account is debited, and accounts payableAccounts PayableAccounts payable is the amount due by a business to its suppliers or vendors for the purchase of products or services. It is categorized as current liabilities on the balance sheet and must be satisfied within an accounting more is credited.

Fixed Asset 3.2

Purchased Equipment for $600,000 in Cash;

Journal Example 3.3

Fixed Asset De-Recognition Entry:

When a fixed assetA Fixed AssetFixed assets are assets that are held for the long term and are not expected to be converted into cash in a short period of time. Plant and machinery, land and buildings, furniture, computers, copyright, and vehicles are all more is removed, the accumulated depreciation account is debited, and the applicable fixed asset account is credited. There could be a chance of a gain or loss in this regard.

Example #4 – Liability Accounting

If a debt is owed but not yet billed, accrued liabilityAccrued LiabilityAccrued liabilities refer to the obligations against expenses which the company incurs over one accounting period; however, it has not made any monetary payment for such expenses in the same accounting period. These expenses appear as liabilities in the corporate balance more entry is to be made. In this case, the accrued expense is a debit to the expense accountExpense AccountExpense accounting is the accounting of business costs incurred to generate revenue. Accounting is done against the vouchers created at the time the expenses are more. Accrued liabilities account is credited.

Entry 4

Example #5 – Equity Accounting

Dividend Declaration:

When dividends are declaredDividends Are DeclaredDividend declared is that portion of profits earned that the company’s board of directors decides to pay off as dividends to the shareholders of such company in return to the investment done by the shareholders through the purchase of the company’s more, the retained earnings account is debited, and the dividends payableDividends PayableDividend payable is that portion of accumulated profits that is declared to be paid as dividend by the company's board of directors. Until the dividend declared is paid to the concerned shareholders, the amount is recorded as a dividend payable in the head current more account is credited.

Journal Example 5

Once dividendsDividendsDividend is that portion of profit which is distributed to the shareholders of the company as the reward for their investment in the company and its distribution amount is decided by the board of the company and thereafter approved by the shareholders of the more are paid, this is a debit to the dividends payable account and a credit to the cash account.

Stock Re-Purchase:

When shares in a business are repurchased, debit treasury stockTreasury StockTreasury Stock is a stock repurchased by the issuance Company from its current shareholders that remains non-retired. Moreover, it is not considered while calculating the Company’s Earnings Per Share or dividends. read more, and credit cash.

Debt Raised from Bank Entry:

If the company borrowed $300,000 from the bank, the journal entry would look like:

Entry 5.1

Example #6 – Transaction with Journal Entries

Let us see another example of accounting transactionsExample Of Accounting TransactionsAccounting Transactions are business activities which have a direct monetary effect on the finances of a Company. For example, Apple representing nearly $200 billion in cash & cash equivalents in its balance sheet is an accounting transaction. read more and their respective journal entries.

Journal Example 6

The journal entries for the above transactions are:

Entry 6.1

Example #7 – Practical

Pen World Ltd. has the following transactions during the month of Feb-2019. Pass the necessary Journal Entry.

Transaction 1:

On Feb 4, 2019, Purchased material worth $50,000;

Journal Entry Example 1

Transaction 2:

On Feb 10, 2019, Sold Pens worth $80,000

Example 1.1

Transaction 3:

On Feb 28, 2019, Incurred Expenses worth $5,000

Journal Entry Example 1.2

Transaction 4:

On Feb 28, 2019, Purchased furniture worth $7,000

Journal Entry Example 1.3

Example #8 – Practical

The following are the transactions of Fun Ltd. Record the transaction in Journal.

Example 2

Journal Entry:

Journal Entry Example 2.1

Example #9 – Practical

Small Finance International Ltd was incorporated in 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.

Example 3

Journal Entry:

Journal Entry Example 3.1

Example #10 – Practical

Different purchases related transactions in Company Material Ltd. are given below. Record the journal entry for each transaction.

Transaction 1:

On 05- Mar- 19 goods purchased worth $5,000

Example 4

Transaction 2:

On 07-Mar-19 Goods worth $500 lost by fire;

Journal Entry Example 4.1

Transaction 3:

On 10-Mar-19 Goods worth $900 lost by theft;

Journal Entry Example 4.2

Transaction 4:

On 15-Mar-19 Goods worth $700 distributed as a charity;

Example 4.3

Transaction 5:

On 20-Mar-19 Goods worth $600 owner withdrew.

Journal Entry Example 4.4


The business enterprise benefits, 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 transactions in chronological order helping and easing out to locate any transaction based on their date. Thirdly it helps in mitigating the reason for the errors being the debit and credit of individual as well as total transactions can be easily compared. Moreover, any entry which is not going into any books, maintained by the company, record in the journal.

Journal Entry Examples Video


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This article 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 –

Reader Interactions


  1. Abdur Rehman says

    The examples were good and understandable recently I have taken admission in financial accounting thank you

    • Dheeraj Vaidya says

      Thanks for your kind words!

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