Compound Journal Entry
A compound journal entry is an entry in which there is more than one debit, more than one credit, or more than one of both debits and credits. It is a combination of several simple journal entries.
e record some transactions which are inter-connected and take place simultaneously by means of a compound journal entry. For example, we record the receipt of cash from a debtor and allowance of discount to him through a single journal entry.
Similarly, we record the transactions of the same nature through a combined entry provided they take place the same day. For example, if the amount is spent on the same day for salaries, wages, stationery items, rent, etc. a combined entry may be passed debiting all the relevant nominal accounts with respective amounts and crediting cash account with the total amount spent.
Following entry to be made
Date Particular Amount (Dr.) Amount (Cr.)
XXX Salary a/c Dr. XXX
Wages a/c Dr. XXX
Stationery a/c Dr. XXX
Rent a/c Dr. XXX
To cash a/c Cr. XXX
An opening entry is the initial entry used to record the transactions occurring at the start of an organization. The contents of the opening entry typically include the initial funding for the firm, as well as any initial debts incurred and assets acquired.
How to Pass an Opening Entry?
When next financial year begins, the accountant passes one journal entry at the beginning of every financial year in which he shows all the opening balance of assets and all the liabilities include capital. After that, the journal entry is called an opening journal entry. Because all assets have a debit balance, so these are debited in an opening journal entry and all liabilities have a credit balance, hence these are credited in an opening journal entry.
Date Particulars Amount Amount
Assets A/c Dr. XX
Liabilities A/c XX
Capital A/c XX
In case all assets exceed all liabilities, the excess will be the value of capital which is showed credit side in the opening journal entry. If however, liabilities are more than the value of all assets, then the resulting excess will be goodwill and it will be debited in the opening journal entry.
Usually, different of assets and liability will be positive and the excess value of assets will be shown as capital on the credit of journal entry. Figures of opening balances can be obtained by taking a look at the balance sheet of the previous year