16.1.4. Types of Journal Entries

Try these first

1. 1.

   What is a simple entry in accounting?

   Hint

   Think of the most basic form of transactions.

2. 2.

   Give an example of a simple entry.

   Hint

   Consider transactions with immediate cash payment.

3. 3.

   What type of journal entry includes one debit and one credit?

   • Simple Entry
   • Compound Entry
   • Adjustment Entry

   Hint

   Think about the most basic transaction.

4. 4.

   True or False: Adjustment entries are made at the beginning of the accounting period.

   • True
   • False

   Hint

   Consider at what point you adjust accounts.

5. 5.

   Design an intricate journal entry for a scenario where a company borrows ₹20,000 from the bank and purchases equipment worth ₹15,000 partly in cash and partly on credit.

   Hint

   Consider how many accounts are affected in the transaction.

6. 6.

   A business paid rent of ₹5,000 for two months in advance. How would you record this transaction?

   Hint

   Think about recording future expenses.