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CMA Foundation · Fundamentals of Financial and Cost Accounting · Journal and Ledger

Which of the following transactions would be recorded through a compound (combined) journal entry?

The part-cash, part-credit sale of Rs 9,000 needs a compound entry. It debits Cash Rs 6,000 and Dev Rs 3,000 and credits Sales Rs 9,000, which involves three accounts. The other transactions each affect just two accounts, so simple entries are enough.

  1. AGoods sold for Rs 9,000, of which Rs 6,000 received in cash and balance due from DevCorrect
  2. BCash paid to Mohan Rs 3,000
  3. CGoods purchased on credit from Sita Rs 7,000
  4. DRent paid by cheque Rs 2,500

Explanation

A compound entry has more than two accounts, with one side having several. The part-cash sale debits Cash Rs 6,000 and Dev Rs 3,000 and credits Sales Rs 9,000, involving three accounts. The other options each involve only one debit and one credit, so they are simple entries.

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