JOURNAL
ENTRIES RELATED TO DEBTORS A/C, CREDITORS A/C, BILLS RECEIVABLES A/C AND BILLS
PAYABLE A/C
1.
Credit Sales
Debtors A/c Dr.
To
Sales A/c
2.
Credit Purchases
Purchases A/c Dr.
To
Creditors A/c
3.
Cash received from debtors/ collection from
debtors.
Cash/Bank A/c Dr.
To
Debtors A/c
4.
Paid to creditors/ Payment to creditors
Creditors A/c Dr.
To
Cash/Bank A/c
5.
Discount allowed to debtors (generally this
entry comes with “cash received from debtors”)
Discount A/c Dr.
To
Debtors A/c
6.
Discount received from creditors. (generally
this entry comes with “cash paid to creditors”)
Creditors A/c Dr.
To
Discount A/c
7.
Bills Receivable drawn by seller on
customer/debtor. (Bills receivable received)
Bills Receivable A/c Dr.
To
Debtors A/c
8.
Bills Receivable Dishonored
Debtors A/c Dr.
To
Bills Receivable A/c
9.
Bills Payable Accepted by Creditors
Creditors A/c Dr.
To
Bills Payable A/c
10.
Bills Payable Dishonored.
Bills Payable A/c Dr.
To
Creditors A/c
11.
Bills Receivable endorsed to creditors
Creditors A/c Dr.
To
Bills Receivable A/c
12.
Bills endorsed to creditors, dishonored.
Debtors A/c Dr.
To
Creditors A/c
13.
Sales return (known as return inward)(Goods
returned by customers/debtors)
Sales return A/c Dr.
To
Debtors A/c
14.
Purchase return (known as returns outward)(Goods
returned to suppliers/creditors)
Creditors A/c Dr.
To
Purchase return A/c
15.
Bad debts
Bad debts A/c Dr.
To
Debtors A/c
Basic rules
1.
Outstanding Expenses/ Income Receivable of
Previous year must be excluded from current year’s Expenses paid or Income
received.
2.
Prepaid Expenses/ Income received in Advance (pre-received
income) of previous year must be included in current year’s Expenses Paid or
Income received.
3.
Adjustments have two effects.
4.
Sequence of A/cs and statements
A.
Trading A/c for the year ended __________
B.
Profit & Loss A/c for the year ended
________
C.
Balance Sheet As on ____________
5.
Working notes
a.
Debtors A/c (to find credit sales/closing
balance of debtors)
b.
Bills Receivable A/c (to find bills drawn on
debtors/closing balance of B/R)
c.
Creditors A/c ( to find credit purchases/closing
balance of creditors)
d.
Bills Payable A/c (to find bills accepted/closing
balance of B/P)
Cash A/c (to find cash sales/cash
purchases/closing balance of cash)