What is a Compound Journal Entry ?

Sometimes, two or more transactions relating to one particular account take place on the same date. When certain transactions of the same nature happen on the same date, it is preferred to pass a single journal entry instead of passing two or more entries.  Such entries can be passed either of the following three ways:

1. By Debiting one account and Crediting two or more accounts.
2. By Crediting one account and Debiting two or more accounts.
3. By Debiting two or more accounts and Crediting two or more accounts.

Journal Entry:

Example 1:

• 01 July 2022: Goods sold for cash ₹10,000.
• 01 July 2022: Cash received from Shubham ₹2,000.
• 01 July 2022: Received Rent of ₹8,000.
• 15 July 2022: Purchased Goods worth ₹20,000.
• 15 July 2022: Cash paid to Sahil ₹6,000.
• 15 July 2022: Commission paid of ₹4,000. 

Solution: 

Example 2: 

• 01 June 2022: Paid Wages ₹2,000.
• 01 June 2022: Paid Advertisement Expenses ₹1,000.
• 01 June 2022: Paid Salaries ₹7,000.
• 10 June 2022: Received Interest ₹5,000.
• 10 June 2022: Received Commission ₹3,000.
• 10 June 2022: Received Dividend ₹2,000.

Solution: