Journal Entries
✏️ In one line
A journal is the first book where every transaction is written, in date order, as a debit and a credit.
📖 Story time
- On 5 January, Meera sells goods for ₹3,000 in cash.
- Cash went up (debit Cash). Sales went up (credit Sales).
- In her journal she writes the debit first, then the credit on the next line starting with 'To', and a short note called the narration.
| Date | Particulars | Dr ₹ | Cr ₹ |
|---|---|---|---|
| Jan 5 | Cash A/c Dr | ₹3,000 | |
| To Sales A/c | ₹3,000 | ||
| (Being goods sold for cash) | |||
🎯 Your turn
Kabir starts his business with ₹50,000 cash. What is the journal entry?
Nice! Correct! Cash (asset) goes up, so it's debited. Capital goes up, so it's credited.
Not quite. Hint: Cash comes in, and the owner's capital grows.
Meera: Meera buys goods worth ₹8,000 from Ravi on credit (she'll pay him later).
Which entry is right?
Nice! Yes! No cash was paid, so Ravi (now someone she owes) is credited.
Not quite. Hint: On credit means no cash moved yet.
The line '(Being goods sold for cash)' under a journal entry is called the narration.
Nice! True. A narration is a short note that explains the entry.
Not quite. Hint: Narrate = explain in words.
Match each transaction to its journal entry.
- Paid rent in cash
- Sold goods for cash
- Put cash into the bank
- Took cash for personal use
Drag a card onto a box, or tap a card and then a box.
Nice! Excellent! In every one, cash going out is credited, and cash coming in is debited.
Not quite. Hint: Money taken by the owner for personal use is called drawings.