CHAPTER 9: BOOK OF ORIGINAL ENTRY: COMPOUND ENTRY, OPENING ENTRY, TRADE DISCOUNT, CASH DISCOUNT, ANSWERS TO ASSIGNMENTS # 9 & 10
LEARNING OUTCOMES: After going through this lesson, you shall be able to understand the following concepts. • Recording of a business transaction in Journal • Compound Journal Entry • Opening Entry • Trade discount and Cash discount . Compound Journal Entry In case there are more than two accounts in a transaction, then sometimes instead of passing a number of Journal entries for a single transaction we prefer to pass a single journal entry. This single journal entry is termed as compound journal entry which involves more than two accounts in a transaction. Let's look into the following transactions: 1. Started business with cash. 2. Purchased goods for cash. 3. Sold goods on credit to X. The above transactions have simple journal entries. They are simple entries because these entries have only one debit account and one credit account. In a transaction, where there are more than one debit or more than one credit or multiple debits and credits, then, for su
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