Basic Journal Entries
Complete Notes and Practical Examples
1. Golden Rule / Modern Debit-Credit Rule
Assets & Expenses: Increase → Debit; Decrease → Credit.
Liabilities, Capital & Income/Revenue: Increase → Credit; Decrease → Debit.
Total Debit = Total Credit
2. Basic Journal Entry Format
Debit Account A/c Dr.
To Credit Account A/c
3. Common Journal Entries
1. Started Business with Cash
Journal Entry:
Cash A/c Dr. ■1,00,000
To Capital A/c ■1,00,000
Reason: Cash increases; Capital increases.
2. Purchased Goods for Cash
Journal Entry:
Purchases A/c Dr. ■20,000
To Cash A/c ■20,000
Reason: Purchases is debited; Cash decreases.
3. Purchased Goods on Credit
Journal Entry:
Purchases A/c Dr. ■15,000
To Ravi A/c ■15,000
Reason: Ravi becomes a creditor.
4. Purchased Furniture for Cash
Journal Entry:
Furniture A/c Dr. ■10,000
To Cash A/c ■10,000
Reason: Furniture is an asset and increases.
5. Sold Goods for Cash
Journal Entry:
Cash A/c Dr. ■25,000
To Sales A/c ■25,000
Reason: Cash increases; Sales revenue increases.
6. Sold Goods on Credit
Journal Entry:
Amit A/c Dr. ■12,000
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Complete Notes and Practical Examples
1. Golden Rule / Modern Debit-Credit Rule
Assets & Expenses: Increase → Debit; Decrease → Credit.
Liabilities, Capital & Income/Revenue: Increase → Credit; Decrease → Debit.
Total Debit = Total Credit
2. Basic Journal Entry Format
Debit Account A/c Dr.
To Credit Account A/c
3. Common Journal Entries
1. Started Business with Cash
Journal Entry:
Cash A/c Dr. ■1,00,000
To Capital A/c ■1,00,000
Reason: Cash increases; Capital increases.
2. Purchased Goods for Cash
Journal Entry:
Purchases A/c Dr. ■20,000
To Cash A/c ■20,000
Reason: Purchases is debited; Cash decreases.
3. Purchased Goods on Credit
Journal Entry:
Purchases A/c Dr. ■15,000
To Ravi A/c ■15,000
Reason: Ravi becomes a creditor.
4. Purchased Furniture for Cash
Journal Entry:
Furniture A/c Dr. ■10,000
To Cash A/c ■10,000
Reason: Furniture is an asset and increases.
5. Sold Goods for Cash
Journal Entry:
Cash A/c Dr. ■25,000
To Sales A/c ■25,000
Reason: Cash increases; Sales revenue increases.
6. Sold Goods on Credit
Journal Entry:
Amit A/c Dr. ■12,000
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