Book-Keeping and Accountancy · Ch 3 — Journal
Compound (Combined) Journal Entry
Compound (Combined) Journal Entry
Most of the entries seen so far involve exactly one account debited and one account credited — a simple journal entry. Many real transactions, however, need more than two accounts to be recorded correctly in a single entry.
Compound (Combined) Journal Entry
A journal entry in which two or more accounts are debited, or two or more accounts are credited (or both), because two or more transactions of the same nature, relating to the same date, are recorded together instead of as separate entries.
A compound entry is used purely for convenience — it is never compulsory — whenever combining related transactions into one entry makes the record clearer rather than recording several near-identical single entries one after another. Whatever its shape (one debit/many credits, many debits/one credit, or many/many), the entry must still balance: total debits must always equal total credits.
Worked illustration. Received cash ₹9,500 from Anil, in full settlement of his account of ₹10,000, having allowed him a cash discount of ₹500 for prompt payment.
Here three accounts are affected in one transaction: Cash A/c (Real — comes in), Discount Allowed A/c (Nominal — an expense/loss to the business), and Anil's A/c (Personal — the giver, since he is settling what he owed).
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) |
|---|---|---|---|---|
| — | Cash A/c ......................Dr. Discount Allowed A/c .......Dr. To Anil's A/c (Being cash received from Anil in full settlement of his account, discount allowed ₹500) | 9,500 500 | 10,000 |
A journal entry in which two or more accounts are debited and/or credited, combining two or more related transactions of the same nature and date into one entry; total debits …