100 Important Journal Entries for BBS 1st Year
Journal entries are the foundation of accounting. Every financial transaction of a business is first recorded in the journal before it is transferred to the ledger accounts.
This complete guide from SanKush Edits contains 100 important journal entries for BBS 1st Year students studying Financial Accounting and Analysis. The entries cover cash transactions, purchases, sales, expenses, income, assets, liabilities, adjustments, bills of exchange and final account transfers.
Students can use this article for exam preparation, numerical practice, homework support and quick revision. Each entry clearly shows the account to be debited and the account to be credited.Basic Rules of Debit and Credit
Before studying the entries, remember these basic rules:
- Assets and expenses increase on the debit side.
- Liabilities, capital and income increase on the credit side.
- Debit the receiver and credit the giver.
- Debit what comes in and credit what goes out.
- Debit all expenses and losses, and credit all incomes and gains.
- The total debit amount must always equal the total credit amount.
Journal Entries 1–25: Basic Business Transactions
| No. | Transaction | Journal Entry |
|---|---|---|
| 1 | Business started with cash | Cash A/c Dr. To Capital A/c |
| 2 | Cash deposited into bank | Bank A/c Dr. To Cash A/c |
| 3 | Cash withdrawn from bank for office use | Cash A/c Dr. To Bank A/c |
| 4 | Goods purchased for cash | Purchases A/c Dr. To Cash A/c |
| 5 | Goods purchased on credit | Purchases A/c Dr. To Creditor’s A/c |
| 6 | Goods sold for cash | Cash A/c Dr. To Sales A/c |
| 7 | Goods sold on credit | Debtor’s A/c Dr. To Sales A/c |
| 8 | Carriage inward paid | Carriage Inward A/c Dr. To Cash/Bank A/c |
| 9 | Carriage outward paid | Carriage Outward A/c Dr. To Cash/Bank A/c |
| 10 | Wages paid | Wages A/c Dr. To Cash/Bank A/c |
| 11 | Salary paid | Salary A/c Dr. To Cash/Bank A/c |
| 12 | Rent paid | Rent A/c Dr. To Cash/Bank A/c |
| 13 | Commission paid | Commission Expense A/c Dr. To Cash/Bank A/c |
| 14 | Insurance premium paid | Insurance A/c Dr. To Cash/Bank A/c |
| 15 | Electricity bill paid | Electricity Expense A/c Dr. To Cash/Bank A/c |
| 16 | Office expenses paid | Office Expenses A/c Dr. To Cash/Bank A/c |
| 17 | Furniture purchased for cash | Furniture A/c Dr. To Cash/Bank A/c |
| 18 | Machinery purchased on credit | Machinery A/c Dr. To Creditor’s A/c |
| 19 | Cash received from a debtor | Cash/Bank A/c Dr. To Debtor’s A/c |
| 20 | Cash paid to a creditor | Creditor’s A/c Dr. To Cash/Bank A/c |
| 21 | Discount allowed to a debtor | Discount Allowed A/c Dr. To Debtor’s A/c |
| 22 | Discount received from a creditor | Creditor’s A/c Dr. To Discount Received A/c |
| 23 | Bad debt written off | Bad Debts A/c Dr. To Debtor’s A/c |
| 24 | Bad debt recovered | Cash/Bank A/c Dr. To Bad Debts Recovered A/c |
| 25 | Depreciation charged on machinery | Depreciation A/c Dr. To Machinery A/c |
Journal Entries 26–50: Income, Expenses and Adjustments
| No. | Transaction | Journal Entry |
|---|---|---|
| 26 | Interest received | Cash/Bank A/c Dr. To Interest Received A/c |
| 27 | Interest paid | Interest Expense A/c Dr. To Cash/Bank A/c |
| 28 | Commission received | Cash/Bank A/c Dr. To Commission Received A/c |
| 29 | Cash withdrawn by owner | Drawings A/c Dr. To Cash/Bank A/c |
| 30 | Goods withdrawn by owner for personal use | Drawings A/c Dr. To Purchases A/c |
| 31 | Additional capital introduced in cash | Cash/Bank A/c Dr. To Capital A/c |
| 32 | Loan received in cash or bank | Cash/Bank A/c Dr. To Loan A/c |
| 33 | Loan repaid | Loan A/c Dr. To Cash/Bank A/c |
| 34 | Bank charges deducted by bank | Bank Charges A/c Dr. To Bank A/c |
| 35 | Advertisement expenses paid | Advertisement A/c Dr. To Cash/Bank A/c |
| 36 | Freight expenses paid | Freight A/c Dr. To Cash/Bank A/c |
| 37 | Repairs expenses paid | Repairs A/c Dr. To Cash/Bank A/c |
| 38 | Printing expenses paid | Printing Expenses A/c Dr. To Cash/Bank A/c |
| 39 | Telephone expenses paid | Telephone Expenses A/c Dr. To Cash/Bank A/c |
| 40 | Postage expenses paid | Postage Expenses A/c Dr. To Cash/Bank A/c |
| 41 | Bill received and accepted by debtor | Bills Receivable A/c Dr. To Debtor’s A/c |
| 42 | Bill accepted in favour of creditor | Creditor’s A/c Dr. To Bills Payable A/c |
| 43 | Bill receivable honoured at maturity | Cash/Bank A/c Dr. To Bills Receivable A/c |
| 44 | Bill payable paid at maturity | Bills Payable A/c Dr. To Cash/Bank A/c |
| 45 | Bill receivable dishonoured | Debtor’s A/c Dr. To Bills Receivable A/c |
| 46 | Salary outstanding at the end of the year | Salary A/c Dr. To Outstanding Salary A/c |
| 47 | Rent paid in advance | Prepaid Rent A/c Dr. To Rent A/c |
| 48 | Interest earned but not yet received | Accrued Interest A/c Dr. To Interest Received A/c |
| 49 | Income received in advance | Income A/c Dr. To Unearned Income A/c |
| 50 | Provision created for doubtful debts | Profit and Loss A/c Dr. To Provision for Doubtful Debts A/c |
Journal Entries 51–75: Capital, Assets and Special Transactions
| No. | Transaction | Journal Entry |
|---|---|---|
| 51 | Interest charged on drawings | Drawings A/c Dr. To Interest on Drawings A/c |
| 52 | Interest allowed on capital | Interest on Capital A/c Dr. To Capital A/c |
| 53 | Goods returned by customer | Sales Return A/c Dr. To Debtor’s A/c |
| 54 | Goods returned to supplier | Creditor’s A/c Dr. To Purchase Return A/c |
| 55 | Cash sales amount deposited into bank | Bank A/c Dr. To Cash A/c |
| 56 | Cash withdrawn from bank for office use | Cash A/c Dr. To Bank A/c |
| 57 | Investment purchased for cash | Investment A/c Dr. To Cash/Bank A/c |
| 58 | Dividend received | Cash/Bank A/c Dr. To Dividend Received A/c |
| 59 | Donation paid | Donation A/c Dr. To Cash/Bank A/c |
| 60 | Charity paid | Charity A/c Dr. To Cash/Bank A/c |
| 61 | Building purchased for cash | Building A/c Dr. To Cash/Bank A/c |
| 62 | Furniture sold at book value | Cash/Bank A/c Dr. To Furniture A/c |
| 63 | Asset sold at a loss | Cash/Bank A/c Dr. Loss on Sale of Asset A/c Dr. To Asset A/c |
| 64 | Asset sold at a profit | Cash/Bank A/c Dr. To Asset A/c To Profit on Sale of Asset A/c |
| 65 | Cash stolen from the business | Loss by Theft A/c Dr. To Cash A/c |
| 66 | Goods destroyed by fire | Loss by Fire A/c Dr. To Purchases/Stock A/c |
| 67 | Insurance claim received | Cash/Bank A/c Dr. To Insurance Claim Receivable A/c |
| 68 | Owner’s personal expenses paid by business | Drawings A/c Dr. To Cash/Bank A/c |
| 69 | Capital converted into a loan | Capital A/c Dr. To Loan A/c |
| 70 | Loan converted into capital | Loan A/c Dr. To Capital A/c |
| 71 | Goodwill purchased | Goodwill A/c Dr. To Cash/Bank A/c |
| 72 | Patent purchased | Patent A/c Dr. To Cash/Bank A/c |
| 73 | Trademark purchased | Trademark A/c Dr. To Cash/Bank A/c |
| 74 | Cash withdrawn for personal use | Drawings A/c Dr. To Cash/Bank A/c |
| 75 | Interest paid on loan | Interest on Loan A/c Dr. To Cash/Bank A/c |
Journal Entries 76–100: Final Accounts and Advanced Adjustments
| No. | Transaction | Journal Entry |
|---|---|---|
| 76 | Interest received on investment | Cash/Bank A/c Dr. To Interest on Investment A/c |
| 77 | Audit fee paid | Audit Fee A/c Dr. To Cash/Bank A/c |
| 78 | Legal charges paid | Legal Charges A/c Dr. To Cash/Bank A/c |
| 79 | Travelling expenses paid | Travelling Expenses A/c Dr. To Cash/Bank A/c |
| 80 | Miscellaneous expenses paid | Miscellaneous Expenses A/c Dr. To Cash/Bank A/c |
| 81 | Purchases transferred to Trading Account | Trading A/c Dr. To Purchases A/c |
| 82 | Sales transferred to Trading Account | Sales A/c Dr. To Trading A/c |
| 83 | Gross profit transferred | Trading A/c Dr. To Profit and Loss A/c |
| 84 | Gross loss transferred | Profit and Loss A/c Dr. To Trading A/c |
| 85 | Net profit transferred to capital | Profit and Loss A/c Dr. To Capital A/c |
| 86 | Net loss transferred to capital | Capital A/c Dr. To Profit and Loss A/c |
| 87 | Closing stock recorded | Closing Stock A/c Dr. To Trading A/c |
| 88 | Rent outstanding | Rent A/c Dr. To Outstanding Rent A/c |
| 89 | Insurance paid in advance | Prepaid Insurance A/c Dr. To Insurance A/c |
| 90 | Commission earned but not received | Accrued Commission A/c Dr. To Commission Received A/c |
| 91 | Income tax paid by a sole proprietor | Drawings A/c Dr. To Cash/Bank A/c |
| 92 | Input VAT or GST paid on purchases | Input VAT/GST A/c Dr. To Cash/Bank A/c |
| 93 | Bank loan received | Bank A/c Dr. To Bank Loan A/c |
| 94 | Office equipment purchased on credit | Office Equipment A/c Dr. To Creditor’s A/c |
| 95 | Stationery purchased for cash | Stationery A/c Dr. To Cash/Bank A/c |
| 96 | Interest due but not yet paid | Interest Expense A/c Dr. To Outstanding Interest A/c |
| 97 | Commission due but not yet received | Commission Receivable A/c Dr. To Commission Income A/c |
| 98 | Owner introduced furniture as capital | Furniture A/c Dr. To Capital A/c |
| 99 | Old machinery sold for cash at book value | Cash/Bank A/c Dr. To Machinery A/c |
| 100 | Closing capital balance in the ledger | Capital A/c Dr. To Balance c/d |
Important Accounting Abbreviations
- Dr. means Debit.
- Cr. means Credit.
- A/c means Account.
- To is written before the credited account.
- The total debit amount must always be equal to the total credit amount.
How to Prepare Journal Entries Correctly
First, identify the two or more accounts affected by the transaction. Next, determine the type of each account, such as asset, liability, capital, expense or income.
After identifying the accounts, decide which account should be debited and which account should be credited. Finally, record a short narration explaining the transaction.
Example: Furniture Purchased for Cash
Furniture A/c Dr.To Cash A/c
Furniture is debited because a business asset has increased. Cash is credited because another asset has decreased.
Frequently Asked Questions
What is a journal entry?A journal entry is the first formal record of a financial transaction in accounting. It identifies the accounts to be debited and credited.
Why are journal entries important for BBS students?Journal entries are required to prepare ledger accounts, trial balance, trading account, profit and loss account and balance sheet. A strong understanding of journal entries makes other accounting chapters easier.
What is the difference between debit and credit?Debit is recorded on the left side of an account, while credit is recorded on the right side. The effect of debit and credit depends on the type of account.
Is drawings a business expense?No. Drawings represent cash, goods or other assets withdrawn by the owner for personal use. Drawings reduce the owner’s capital.
How is a credit purchase of goods recorded?Purchases A/c Dr.
To Creditor’s A/c
When an asset such as furniture or machinery is purchased on credit, the relevant asset account is debited instead of the Purchases Account.
Conclusion
These 100 Important Journal Entries for BBS 1st Year cover most of the transactions commonly asked in Financial Accounting and Analysis examinations. Students should not only memorize the entries but also understand why each account is debited or credited.
Regular practice will help you solve journal, ledger, trial balance and final account questions more accurately.
For more BBS notes, model questions, old question papers and exam preparation materials, visit SanKush Edits.
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