Journal

Contains more than one debit or credit or both

Step 1: Understand simple vs compound entries. A simple entry affects exactly TWO accounts — one debit and one credit. Step 2: A compound entry is a COMBINATION of two or more simple entries. It may have multiple debits, multiple credits, or both. Step 3: Example — paying both salary (₹6,000) and rent (₹12,000) in cash on the same day can be combined: Salary A/c Dr. ₹6,000 + Rent A/c Dr. ₹12,000 | To Cash A/c ₹18,000. Step 4: Condition for compound entry — same date AND one account is common. Step 5: Why others are wrong — Option A describes Special Journals; Option C is incorrect; Option D de

Cash A/c Dr. ₹10,000 | Bad Debts A/c Dr. ₹2,000 | To Suresh A/c ₹12,000

Step 1: Identify the situation — Suresh owes ₹12,000 but pays only ₹10,000. The ₹2,000 unpaid amount is a loss (bad debt). Step 2: Three accounts are affected: Cash A/c (asset increases by ₹10,000 received), Bad Debts A/c (loss/expense increases by ₹2,000), and Suresh's A/c (debtor account decreases by full ₹12,000). Step 3: Cash A/c Dr. ₹10,000 (asset increase), Bad Debts A/c Dr. ₹2,000 (loss increases), To Suresh A/c ₹12,000 (asset decreases — debtor is cleared). Step 4: Total debit = ₹12,000 = Total credit ₹12,000 — balances! Step 5: This is a compound entry with two debits and one credit.

₹18,000

Step 1: Understand Trade Discount — it is a reduction given on the listed price, usually for bulk purchase. Step 2: Key rule: Trade Discount is NEVER recorded separately in the Journal. It is simply deducted from the sale price and only the NET amount is recorded. Step 3: Calculate net amount — ₹20,000 × 10% = ₹2,000 trade discount. Net amount = ₹20,000 − ₹2,000 = ₹18,000. Step 4: Journal entry: Kavita A/c Dr. ₹18,000 | To Sales A/c ₹18,000. Step 5: Contrast with Cash Discount — Cash discount IS recorded in Journal as it is allowed after the invoice is raised.

Salaries A/c Dr. | To Salaries Outstanding A/c

Step 1: Outstanding expenses are expenses that have been INCURRED but NOT yet paid during the accounting period. Step 2: Since salaries relate to the current period (March 2024), they MUST be recorded as an expense in this period — matching principle. Step 3: Salaries A/c is an expense — it increases → DEBIT Salaries A/c. Step 4: Outstanding Salaries A/c is a liability (we owe this amount) — liability increases → CREDIT Salaries Outstanding A/c. Step 5: Entry: Salaries A/c Dr. ₹8,000 | To Salaries Outstanding A/c ₹8,000. Option D (To Cash) is wrong because cash has NOT been paid yet.