Journalizing of Household Transactions for a Month

INTRODUCTION:

A journal entry is an act of keeping or making records of any transactions, either Economic or non-economic. In this project, we will be discussing the journalizing of household transactions for a month.

Negotiations are recorded in an accounting journal that shows a firm’s debit and credit balances. The journal entry can contain several recordings, each of which is either a debit or a credit. The entire of the debits must equal the entire of the credits, or the journal entry is taken into account unbalanced.

Journal entries can record unique items or recurring items like depreciation or bond amortization. In accounting software, journal entries are frequently entered using an independent module from accounts payable, which often has its sub-ledger, which affects the overall ledger. As a result, journal entries directly change the account balances on the whole ledger. An accurately cataloged journal entry includes the accurate date, an amount which will be debited, an amount which will be credited, details of Negotiations, and select reference number.

AIMS AND OBJECTIVES:

This project aims at journalizing of household transactions for a month.

There are essential objectives for this project.  They are given below.

Objectives:

  •  To understand journal entry
  •  To know the importance of journals in accounts
  •  To follow the household transactions every month
  •  To see the role played by journal entry in daily households
  •  To ascertain any doubts regarding the journalizing of household transactions

METHOD AND METHODOLOGY:

The method used to gather the required information on the project is an internet survey method that falls under the secondary data collection method. The Internet has extensive knowledge on this subject. It has a vast collection of data on the journal entry. The survey for this project has unveiled information that is covered within major few points. They are listed below and explained in a detailed report of the project.

  • What is journaling entry?
  • The purpose of the journal entry
  • Rules of journalizing
  • Journalized household transactions for a month

DETAIL REPORT OF PROJECT:

  • What is journaling entry?

Journal is that the book of prime entry also called the book of original entry. That is, transactions are first entered here and is that the most important book of accounts. The sales are recorded systemically and in chronological order.

They are entered to point out which accounts should be debited or credited. Documenting of negotiations in the journal is termed as Journalizing the entries. The transactions are first entered here, and it’s then subsequently posted to a different book of account called “Ledger.”

To record journal entries, one must know sort of Accounts, Golden Rules of Accounting, Experience of Working, Knowledge on debit, and credit transactions.

There are three sorts of accounts in accounting:

  1. Personal accounts contain all those accounts which are associated with an individual, business, firm, etc. There also are subtypes of a private account. For example, in Mohan’s statement, Apple ltd. Account etc. Capital account.    Dr. the receiver. Cr. the giver.
  1. Real accounts contain all those accounts which are associated with assets. Intangible assets also are considered as Real Accounts — for example, factory and raw material account, etc.   Dr. what’s comes in. Cr. what’s goes out.
  1. Nominal accounts contain all those accounts which are associated with expenses, losses, Income, and Gains — for example, Rent account, wages account, etc   Dr. are all expenses and losses. Cr. are all income and gains.
  • The purpose of a journal entry

Journal entries present groundwork information for all of a business’s other financial statements. They’re employed by auditors to research how financial transactions impact a business.

Each entry should include the date of the transaction, the parties involved, a debit from a minimum of one account, a credit to a minimum of one other consideration, a receipt or check number, and a memo describing other details involved within the transaction – anything you would possibly not be likely to recollect months or years later.

If you buy and use accounting software, it’ll presumably look out of these details for you. But you ought to be ready to handle your journal entries and ledger yourself with some basic understanding of the method if you do not think that sort of expense is essential quite yet because you’re just starting.

  • Rules of journalizing

  1. The date column is supposed to record the date of the transaction.
  2. The second column is supposed to mark the accounts to be debited and credited.
  3. The third column is supposed to record the number of the ledger, where the entries are posted.
  4. during this column, we write the amount to be debited against Dr.
  5. during this column, we write the amount to be credited against Cr.

Journal entry example

In the second column, within brackets, a quick explanation of the transaction is written, which is understood as narration. The golden rules to recollect are:

  1. Debit the receiver and Credit the giver.
  2. The debit is what comes in, and credit is what goes out.
  3. Debit all the expenses or losses and credit all the incomes, gains, or profits.
  • Journalized household transactions for a month.

Following are the translations and Journal Entries-

Cash brought in by the proprietor as capital Rs. 60000

Cash Account Debit 60, 000

Proprietor’s capital Account Credit 60,000

Goods purchased on credit from Malang Rs. 4,000

Purchase account debit 4000

Malang account credit 4000

Furniture purchased for cash Rs. 14000

Furniture Account Debit 14000

Cash Account Credit 14000

Goods sold on credit to Daksh Rs. 2000

Daksh Account Debit 2000

Sale Account Credit 2000

Goods purchased for cash Rs. 6000

Purchase account debit 6000

Cash account credit 6000

Goods sold for cash Rs. 4000

Cash account debit 4000

Sale account credit 4000

Rent paid for the shop to landlord 6000

Rent Account Debit 6000

Cash Account Credit 6000

The commission received in cash 2000

Cash Account Debit 2000

Commission Account Credit 2000

Money deposited into bank 30000

Bank Account Debit 30000

Cash Account Credit 30000

Cash is withdrawn from bank for office use Rs. 22000

Cash Account Debit 2200

Bank Account Credit 2200

Cash has drawn by the proprietor from the business for personal use Rs. 5000

Drawing Account Debit 5000

Cash Account Credit 5000

Goods are given as charity Rs. 1000

Charity Account Debit 1000

Purchase Account Credit 1000

Bad Debts are written off Rs. 500

Bad Debt Account Debit 500

Debtor Account Credit 500

Bad debts recovered in cash Rs. 300

Cash Account Debit 300

Bad Debts Recovered Account Credit 300

Depreciation on fixed assets Rs. 650

Depreciation Account Debit 650

Fixed Asset Account Credit 650

Goods are given as free samples Rs. 1000

Advertising Account Debit 1000

Purchase Account Credit 1000

Interest allowed on capital Rs. 2000

Interest on capital Account Debit 2000

Capital Account Credit 2000

Interest charged on drawings Rs. 200

Drawing Account Debit 200

Interest on drawing account Credit 200

Bank charges or interest charged by bank Rs. 270

Bank charge Account Debit 270

Bank account Credit 270

Goods lost by fire Rs. 100

Loss by Fire Account Debit 100

Purchase Account Credit 100

A loan is taken Rs. 60000

Cash Account Debit 60000

Lender’s loan Account Credit 60000

Interest paid on loan. Rs. 1500

Interest on loan Account Debit 1500

Cash Account Credit 1500

Interest on loan due but not paid in cash is Rs. 550

Interest on loan Account Debit 550

Loan or Creditor Account 550

The investment purchased is Rs. 30,000

Investment Account Debit 30000

Cash Account Credit 30000

Cash stolen from the office is Rs. 5000

Loss by Theft Account Debit 5000

Cash Account Credit 5000

Cash paid to a creditor in full settlement.

Malang Account Debit 5000

Cash Account Credit 2500

Discount Received Account Credit 500

Cash received from a debtor in full settlement.

Cash Account Debit 3000

Discount Allowed Account Debit 300

Daksh Account Credit 2700

ANALYSIS OF DATA:

After analyzing the gathered data,

The Journal is a Book of Chief Entry. It’s otherwise referred to as the Book of Original Entry. These entries are then affixed from the journal into the ledger. As such, the accounting is understood because of the Principal Book or the most Book. The ledger is otherwise referred to as the Book of last Entry. Hence, the journal is recognized as Subsidiary Record or Subsidiary Book. Journalizing is an act of recording the debit and credit aspects of a business transaction in journal, alongside evidence of the sale, referred to as narration.

The information recorded within the journal, which certainly is a symbol or evidence within the court of law. It provides the bottom for ledger posting and also for cross-checking of entries posted. It maintains the detailed record of transactions within the sort of narration, written immediately after passing the entrance; hence it provides a highlight of the sale done. Because the transactions are recorded in chronological order, it’s useful for straightforward reference within the future.

CONCLUSION:

To successfully conclude my findings,

Every business carries various transactions throughout the day. Some sales are similar; many are different. Hence, it’s impossible to stay all the journalizing process in mind without recording it. Of these transactions are essential and thus can’t be avoided or omitted. So, to avoid any mistake or omission, these transactions are recorded in books. Journalizing is the traditional sort of keeping track of happenings within the organization.

DISCUSSION:

The discussion with my guidance counselor on this project, it is revealed:

Journal entries supply documentation of all business transactions in one place on the time and date basis. All sales are recorded on the idea of receipts or bills, so we will check the authenticity of every journal entries with their laws. There’s a minimum chance to avoid any particular transaction because in journal transactions are recorded date basis. Accountant writes every journal entry’s narration bellow of that journal entry, so other auditors can know what the rationale of that journal entry is. In journal entries, every transaction is recorded after an in-depth analysis of two accounts on the idea of a double-entry bookkeeping system, so there’s minimal chance of mistake in the journal.

SUGGESTION:

After discussing this project with friends and peers, they have individual opinions and recommendations. They are given below:

There should be activities and practical to teach students about journal entries in college.

There should be a seminar for the uneducated public for free.

This should be taught at the school level so children would be able to have proper knowledge about accounting early on in their life.

ACKNOWLEDGMENT:

My profound gratitude to all the faculty members of the Department, for their timely assistance and encouragement throughout my research work.

I duly acknowledge the encouragement and support from the research scholars in the Department, and all my colleagues and friends.

It gives me immense pleasure to take the opportunity to all the people who are directly or indirectly involved in the completion of my project based on Journalizing household tractions for a month.

With deep reverence, I offer my deepest gratitude _____, without whom this project could not have been fulfilled.

Lastly, I thank Almighty, my parents, family members, friends, and teachers for their constant encouragement and support, without which this project would not be possible.

Name of School/College

BIBLIOGRAPHY / REFERENCE:

  • https://www.thebalancecareers.com/definition-of-a-journal-entry-3515176
  • http://www.yourarticlelibrary.com/accounting/journal/rules-of-journalising-with-specimen/50007
  • https://tallygame.com/accounting/what-is-journalising/
  • https://en.wikipedia.org/wiki/Journal_entry
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