Closing Entry: How to record in the books? | maijson GKB.

Journal entries are the basic building blocks of financial record-keeping in the accounting domain. They offer an overview of each financial transaction a company does, guaranteeing precision and openness. In this blog, will discuss different types of journal entries with examples from the real world to help explain how businesses record their financial actions in an organized and consistent way.

 1. Simple Cash Sale: Sold merchandise for cash.

Debit Cash
Credit Sales

 2. Credit Sale: Sold goods on credit.

Debit Accounts Receivable
Credit Sales

 3. Return of Goods Sold on Credit:

Debit Sales Returns and Allowances
Credit Accounts Receivable

 4. Purchase of Goods on Credit: Bought goods on credit from a supplier.

Debit Inventory
Credit Accounts Payable

 5. Purchase Return for Goods Bought on Credit:

Debit Accounts Payable
Credit Inventory

 6. Cash Purchase: Bought equipment for cash.

Debit Equipment
Credit Cash

 7. Write-down of Inventory Value:

Debit Cost of Goods Sold
Credit Inventory

 8. Loan Received: Obtained a loan from the bank.

Debit Cash
Credit Loan Payable

 9. Expense Payment: Paid rent for the month.

Debit Rent Expense
Credit Cash

 10. Salary Payment: Issued paychecks to employees.

Debit Salary Expense
Credit Cash

 11. Dividends Declared: Declared dividends to shareholders.

Debit Retained Earnings
Credit Dividends Payable

 12. Depreciation: Recorded depreciation on equipment.

Debit Depreciation Expense
Credit Accumulated Depreciation

 13. Receiving a Customer Payment: Received payment from a customer.

Debit Cash
Credit Accounts Receivable

 14. Write-off of Bad Debt: Recognized a customer's debt as uncollectible.

Debit Bad Debt Expense
Credit Accounts Receivable

 15. Prepaid Expenses: Paid for insurance in advance.

Debit Prepaid Insurance
Credit Cash

 16. Accrual of Unpaid Expenses: Accrued interest expense.

Debit Interest Expense
Credit Accrued Liabilities

 17. Sale of Assets: Sold old equipment.

Debit Cash
Credit Equipment

 18. Stock Issuance: Issued new shares to investors.

Debit Cash
Credit Common Stock

 19. Amortization of Intangible Assets:

Debit Amortization Expense
Credit Intangible Asset

 20. Tax Payment:

Debit Income Tax Expense
Credit Cash

 21. Interest Income Recognition:

Debit Cash
Credit Interest Income

 22. Correction of Errors:

Debit Retained Earnings
Credit the affected accounts

 23. Stock Buyback:

Debit Treasury Stock
Credit Cash

 24. Issuance of Bonds:

Debit Cash

          Credit Bonds Payable

Conclusion: Any firm hoping to make a profit needs to comprehend and become an expert at journal entries. These entries serve as the basis for more intricate accounting procedures in addition to offering a thorough record of financial transactions. A solid understanding of journal entries is similar to having a compass to navigate the complexity of the business world because the financial industry is a dynamic landscape. Also, keep in mind that accuracy in journal entries is essential to preserving an organization's financial stability and promoting well-informed decision-making.

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