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We are Sharing With You “Essential Journal Entries for Accurate Financial Accounting” . So kindly Check Out our http://www.castudynotes.com website and ALL the Best for Your upcoming Exams.

CA STUDY NOTES

These key journal entries provide a comprehensive guide for common financial transactions. Each one serves a specific purpose in maintaining accurate and transparent financial records, essential for internal management and external reporting.

Key Journal Entries-

Accrued Revenue
When earned but not yet received:
Dr: Accounts Receivable
Cr: Revenue
When received:
Dr: Bank
Cr: Accounts Receivable

Accrued Expenses
When owed but not yet paid:
Dr: Expense (e.g., Wages Expense)
Cr: Accrued Expense
When paid:
Dr: Accrued Expense
Cr: Bank

Prepaid Expense
When paid in advance (e.g., insurance):
Dr: Prepaid Expense
Cr: Bank
When used:
Dr: Expense
Cr: Prepaid Expense

Depreciation
To record asset depreciation:
Dr: Depreciation Expense
Cr: Accumulated Depreciation

Bad Debt Expense
To recognize expected uncollectible amounts:
Dr: Bad Debt Expense
Cr: Allowance for Doubtful Accounts

Inventory Purchase on Credit
To record inventory acquired on credit:
Dr: Inventory
Cr: Accounts Payable

Inventory Sale
To record sales revenue:
Dr: Bank
Cr: Revenue
To record the cost of goods sold (COGS):
Dr: Cost of Goods Sold
Cr: Inventory

Payroll Entry
When wages are due:
Dr: Payroll Expense
Cr: Wages Payable
When wages are paid:
Dr: Wages Payable
Cr: Bank

Interest Expense
When interest accrues on a loan:
Dr: Interest Expense
Cr: Interest Payable
When interest is paid:
Dr: Interest Payable
Cr: Bank

Sales Tax Payable
To record collected sales tax:
Dr: Bank
Cr: Sales Revenue
Cr: Sales Tax Payable

Advance from Customers (Unearned Revenue)
When payment is received in advance:
Dr: Bank
Cr: Unearned Revenue

When revenue is earned:
Dr: Unearned Revenue
Cr: Revenue

Loan Payment
To record loan repayment:
Dr: Loan Payable
Cr: Bank

Tax Payment
To record tax payments:
Dr: Income Tax Expense
Cr: Bank

Vendor Payment
When paying suppliers:
Dr: Accounts Payable
Cr: Bank

Currency Exchange Adjustment
When exchange rates fluctuate:
Dr: Foreign Exchange Loss
Cr: Foreign Exchange Gain

Dividends Declared
When dividends are announced:
Dr: Retained Earnings
Cr: Dividends Payable

Payment of Dividends
When dividends are paid:
Dr: Dividends Payable
Cr: Bank

Loan Interest Paid
To record loan interest payments:
Dr: Interest Expense
Cr: Bank

Amortization of Intangible Assets
To write off intangible assets (e.g., patents):
Dr: Amortization Expense
Cr: Accumulated Amortization

Write-off of Uncollectible Accounts (Bad Debt)
To remove uncollectible amounts:
Dr: Allowance for Doubtful Accounts
Cr: Accounts Receivable

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