Goods lost

Stock destroyed or damaged by fire or accident etc.

1) When actual goods destroyed or damaged or lost
Loss of goods A/c Dr
(Amt of irrecoverable loss)
Insurance claim receivable A/c Dr
(To the extent of the loss recoverable )
To Purchase A/c
(Total amt of loss)
2) When Compensation received from Insurance Co./Railways etc
Bank A/c Dr
To Insurance claim receivable A/c
(Amt to the extent of the loss recovered )
Goods given Away
Sometimes a business enterprise gives goods without
any consideration, such as giving free samples for sales
promotion , giving goods in charity, gift for client
entertainment & for sales promotion.
Sometimes owner uses the goods for his personal use.
The Journal Entry in such cases will be
Free samples A/C/ Donation A/C / Drawings A/C Dr
To Purchase A/C
Drawings made by the proprietor
a) Cash drawn
Drawings A/c Dr.
To Bank/Cash A/c
b) Goods withdrawn for personal use :
Drawings A/c Dr.
To Purchase A/c
Loss on Account of Bad Debts
Bad Debts is a loss on account of non recovery
of dues from credit customers.
JE
At the time of sale
Partys A/c Dr
To Sales A/c
Writing off bad debts
Cash/ Bank A/c Dr (Only if any cash received )
Bad Debts A/c Dr (For the amount of loss)
To Partys A/c (Total amount)
Dishonour of Cheque Deposited in Bank
The incidence of non-clearance of cheque due to certain
reasons is called Dishonour of Cheque .
It is also called bouncing of cheque.
Entry at the time of depositing the cheque
Bank A/C Dr.
To Partys A/c
When Bank intimates about the Dishonour of
Cheque
Partys A/c Dr.
To Bank A/C
If Bank levied some bank charges for dishonour
Partys A/c Dr.
Bank charges A/c Dr
To Bank A/C
Compound Entry
Set of transactions take place on a single day which
are of same nature
E.g. either expenses or revenue
Salary A/c Dr 10,000
Rent A/c Dr 5,000
To Cash A/c 15,000
Journalize the following transactions in books of Varun Enterprises
2010 July
1 Varun commenced business with 10,00,000 cash and a building worth
Rs.70,00,000.
3 Purchased goods in the beginning 5,00,000
7 Sold goods to Dinesh & co. and received cheque & deposited in bank
Rs.65,000
8 The bank has informed that the Bank has returned the above cheque as it
was dishonoured.
17 Goods sold to Ramanuj & co Rs.60,000
18 Purchased goods worth Rs. 10000 less 10% Trade discount from Shekhar
19 Paid Commission Rs. 11,000
20 Goods burnt by the fires 39,000
21 Received cash on account from Dinesh 33,000
25 Goods distributed as free samples.50,000
26 Received Rs. 57,500 from Ramanuj & co in full settlement.
27 Withdraw cash for personal use 50,000
28 Purchased machinery by cheque 2,00,000
30 Purchased goods for cash 50,000
31 Borrowed a loan from Bank 5,00,000