Journal Entry Examples: 100+ Accounting Entries with Debits & Credits (2026)

Updated May 1, 2026 by Eduyush Team

Journal Entry Examples

📋 Written by Ritika Nath — Chartered Accountant | 12+ Years Teaching Accounting | Senior Faculty at Eduyush

Trained 3,000+ students for CA Foundation, B.Com, and ACCA Exams. After reviewing 1,500+ student exam papers and running live accounting workshops, Ritika has identified the exact journal entry patterns that appear in 80% of exams and real business scenarios.

What Is a Journal Entry in Accounting?

A journal entry is the first written record of a financial transaction, recorded using the double-entry bookkeeping system. Every transaction affects at least two accounts: one is debited and one is credited, and the total of all debits must always equal the total of all credits.

Journal entries are the foundation of the entire accounting cycle. From the journal, transactions flow to the general ledger, and ultimately into financial statements like the income statement and balance sheet.

The basic accounting equation that every journal entry must preserve is:

Assets = Liabilities + Owner’s Equity

Standard Journal Entry Format

Date: YYYY-MM-DD
Account Name (Debit)          Dr.   ₹XX,XXX
    To Account Name (Credit)        ₹XX,XXX
(Being: brief explanation of the transaction)

Key formatting rules:

  • Debit account is written first, flush left
  • Credit account is indented with “To” prefix
  • Total debits must equal total credits
  • Every entry needs a narration (the “Being” line)
  • Date of the actual transaction must be recorded

Rules of Debit and Credit: The DEALER Method

The most common reason students get journal entries wrong is not understanding when to debit and when to credit. Here is the method that works every time.

💡 The DEALER Acronym

Dividends   Expenses   Assets   Losses   → Increase with a DEBIT

Capital   Revenue   Liabilities   Gains   → Increase with a CREDIT

Account Type Debit Effect Credit Effect Example
Assets ↑ Increase ↓ Decrease Cash, Equipment, Inventory
Liabilities ↓ Decrease ↑ Increase Loans Payable, Creditors
Owner’s Equity ↓ Decrease ↑ Increase Capital, Retained Earnings
Revenue / Gains ↓ Decrease ↑ Increase Sales, Interest Income
Expenses / Losses ↑ Increase ↓ Decrease Rent, Salary, Depreciation

For an in-depth look at how the double-entry accounting system works, including golden rules and worked examples, see our dedicated guide.

Types of Journal Entries

Understanding the types of journal entries helps you apply the right format for every business transaction. There are six main types:

Type When Used Example
Simple Entry One debit, one credit Cash sale
Compound Entry Multiple debits or credits Payroll with TDS deductions
Adjusting Entry Period-end accruals & deferrals Accrued salary, prepaid insurance
Closing Entry Year-end to close temporary accounts Close revenue to Income Summary
Reversing Entry Reverses prior period accruals Reverse accrued salary at month-start
Opening Entry Start of a new accounting period Bring forward opening balances

15 Journal Entry Examples for Beginners

These are the most common journal entry examples you will encounter in CA Foundation, B.Com, and ACCA exams. Master these 15 before moving to advanced categories.

# Transaction Journal Entry Logic
1 Owner invests ₹1,00,000 cash Cash A/c Dr. ₹1,00,000
To Capital A/c ₹1,00,000		 Asset in, Equity up
2 Cash purchase of inventory ₹15,000 Purchases A/c Dr. ₹15,000
To Cash A/c ₹15,000		 Expense up, Asset out
3 Credit sale to Priya ₹8,000 Priya A/c Dr. ₹8,000
To Sales A/c ₹8,000		 Debtor (asset) up, Revenue up
4 Paid monthly rent ₹12,000 cash Rent Expense A/c Dr. ₹12,000
To Cash A/c ₹12,000		 Expense up, Asset out
5 Received payment from Priya ₹8,000 Cash A/c Dr. ₹8,000
To Priya A/c ₹8,000		 Cash in, Debtor cleared
6 Purchased computer on credit from TechMart ₹45,000 Computer Equipment A/c Dr. ₹45,000
To TechMart A/c ₹45,000		 Asset up, Creditor up
7 Paid salaries ₹25,000 cash Salaries Expense A/c Dr. ₹25,000
To Cash A/c ₹25,000		 Expense up, Asset out
8 Took bank loan ₹5,00,000 Bank A/c Dr. ₹5,00,000
To Loan Payable A/c ₹5,00,000		 Asset up, Liability up
9 Owner withdraws ₹10,000 cash Drawings A/c Dr. ₹10,000
To Cash A/c ₹10,000		 Drawings up (equity down), Cash out
10 Paid electricity bill ₹2,500 Electricity Expense A/c Dr. ₹2,500
To Cash A/c ₹2,500		 Expense up, Cash out
11 Returned defective goods to Raj Traders ₹3,000 Raj Traders A/c Dr. ₹3,000
To Purchase Returns A/c ₹3,000		 Creditor reduced, Returns recorded
12 Charged annual depreciation ₹9,000 Depreciation Expense A/c Dr. ₹9,000
To Accumulated Depreciation A/c ₹9,000		 Expense up, Asset book value down
13 Paid prepaid insurance ₹12,000 for 12 months Prepaid Insurance A/c Dr. ₹12,000
To Cash A/c ₹12,000		 Prepaid asset up, Cash out
14 Accrued interest income ₹1,500 (not yet received) Interest Receivable A/c Dr. ₹1,500
To Interest Income A/c ₹1,500		 Asset up (receivable), Revenue recorded
15 Bad debt write-off for Ramesh ₹5,000 Bad Debts Expense A/c Dr. ₹5,000
To Ramesh A/c ₹5,000		 Expense up, Debtor removed

For a comprehensive treatment of bad debt expense journal entries including both the direct write-off and allowance methods, see our dedicated guide.

Adjusting Journal Entries (Accruals, Deferrals & Depreciation)

Adjusting journal entries are made at the end of an accounting period to ensure revenues and expenses are recognised in the correct period under accrual accounting. They are critical for producing accurate financial statements.

Type Scenario Journal Entry
Accrued Expense Salary of ₹18,000 due, not yet paid Salary Expense A/c Dr. ₹18,000
To Salary Payable A/c ₹18,000
Accrued Revenue Interest earned ₹1,500, not yet received Interest Receivable A/c Dr. ₹1,500
To Interest Income A/c ₹1,500
Prepaid Expense (monthly recognition) Recognise 1 month of ₹12,000 prepaid insurance Insurance Expense A/c Dr. ₹1,000
To Prepaid Insurance A/c ₹1,000
Deferred Revenue Earned ₹5,000 of previously unearned revenue Unearned Revenue A/c Dr. ₹5,000
To Revenue A/c ₹5,000
Depreciation Annual depreciation on machinery ₹9,000 Depreciation Expense A/c Dr. ₹9,000
To Accumulated Depreciation A/c ₹9,000
Bad Debt Provision Create allowance for doubtful accounts ₹4,000 Bad Debt Expense A/c Dr. ₹4,000
To Allowance for Doubtful Accounts ₹4,000

See also: Allowance for Doubtful Accounts and Bad Debts in Accounting for full worked examples.

GST Journal Entry Examples

Recording GST journal entries correctly is essential for businesses registered under the Goods and Services Tax framework. Here are the most common GST accounting entries.

For 75+ detailed GST entries covering input tax credit, reverse charge, and refunds, see our full GST Accounting Entries guide.

Scenario Journal Entry Note
Cash sale ₹10,000 + GST 18% = ₹11,800 Cash A/c Dr. ₹11,800
To Sales A/c ₹10,000
To Output GST A/c ₹1,800		 Collect GST as liability
Credit purchase ₹5,000 + GST 18% = ₹5,900 Purchases A/c Dr. ₹5,000
Input GST A/c Dr. ₹900
To Creditor A/c ₹5,900		 Claim input tax credit
GST payment to government (net) Output GST A/c Dr. ₹1,800
To Input GST A/c ₹900
To Cash A/c ₹900		 Set-off ITC, pay balance

Bank Reconciliation Journal Entries

After completing a bank reconciliation statement, correcting entries are needed for items in the cashbook but not yet on the bank statement, and vice versa. Common adjustments include bank charges, direct deposits, and dishonoured cheques.

Item Journal Entry
Bank charges ₹500 not recorded in books Bank Charges A/c Dr. ₹500
To Bank A/c ₹500
Interest credited by bank ₹1,200 Bank A/c Dr. ₹1,200
To Interest Income A/c ₹1,200
Dishonoured cheque ₹3,000 returned Debtor A/c Dr. ₹3,000
To Bank A/c ₹3,000

Retained Earnings Journal Entries

Retained earnings are the cumulative profits kept in the business after paying dividends. Key journal entries that affect retained earnings include closing entries, dividend declarations, and prior-period adjustments.

Transaction Journal Entry
Transfer net profit ₹2,00,000 to retained earnings Income Summary A/c Dr. ₹2,00,000
To Retained Earnings A/c ₹2,00,000
Dividend declared ₹50,000 Retained Earnings A/c Dr. ₹50,000
To Dividends Payable A/c ₹50,000
Dividend paid in cash ₹50,000 Dividends Payable A/c Dr. ₹50,000
To Cash A/c ₹50,000

Related reading: Is Retained Earnings a Debit or Credit? | Statement of Retained Earnings

Journal Entries for Errors in Accounting

When mistakes are found, correcting journal entries are made. Errors must be corrected using an additional entry, not by erasing the original.

Error Correcting Entry
Salary ₹5,000 posted to Rent Expense incorrectly Salary Expense A/c Dr. ₹5,000
To Rent Expense A/c ₹5,000
Cash sale ₹2,000 recorded as ₹200 Cash A/c Dr. ₹1,800
To Sales A/c ₹1,800 (to correct understatement)

5 Common Journal Entry Mistakes (And How to Fix Them)

⚠ Watch Out For These

After reviewing 1,500+ student exam papers, these are the five mistakes that appear most frequently in journal entry answers.

  1. Reversing debit and credit — Use the DEALER acronym every time. If you are unsure, ask: is this account an asset, liability, equity, revenue, or expense? Then apply the rule.
  2. Using the wrong account name — “Sales Revenue” and “Sales A/c” may both be acceptable, but “Income A/c” is too vague. Be specific.
  3. Unbalanced totals — Every entry must have equal debits and credits. A common cause is forgetting a second credit in a compound entry.
  4. Mixing personal and business transactions — Owner personal expenses should be recorded to Drawings A/c, not directly to an expense account.
  5. Omitting the narration — In formal accounting (and exams), every entry must have a “Being” line. Marks are lost without it.

Frequently Asked Questions About Journal Entries

What is a journal entry in accounting?

A journal entry is the first written record of any financial transaction using the double-entry bookkeeping system. It records which accounts are affected, by how much, and in which direction (debit or credit). Every journal entry must have total debits equal to total credits.

What are the rules of debit and credit?

The rules depend on the account type. Assets, expenses, and losses increase with a debit. Liabilities, equity, revenue, and gains increase with a credit. Use the DEALER acronym as your memory aid: Debits = Dividends, Expenses, Assets, Losses; Credits = Capital, Revenue, Liabilities, Gains.

What is the difference between a simple and compound journal entry?

A simple journal entry affects exactly two accounts — one debit and one credit. A compound journal entry involves three or more accounts in a single transaction, such as a payroll entry with gross salary, tax deductions, and net pay.

What are adjusting journal entries?

Adjusting journal entries are made at the end of an accounting period to ensure that all revenues and expenses are matched to the correct period under accrual accounting. They include accrued expenses, accrued revenues, prepaid expenses, deferred revenues, and depreciation.

What is the journal entry for depreciation?

Debit Depreciation Expense and credit Accumulated Depreciation by the periodic depreciation amount. Example: Depreciation Expense A/c Dr. ₹9,000 / To Accumulated Depreciation A/c ₹9,000.

What is the difference between the periodic and perpetual inventory system for journal entries?

Under the periodic system, purchases are debited to a “Purchases A/c” and inventory is only counted at period-end. Under the perpetual system, inventory is debited directly each time a purchase is made, keeping a running balance.

Do journal entries need narrations?

Yes. In formal accounting records and in exam answers, every journal entry should include a narration (the “Being” line) that briefly explains the nature of the transaction. It serves as an audit trail and earns marks in assessments.

Journal entries connect to every part of the accounting cycle. Here are the Eduyush guides that build on what you have learned in this post:

📚 Quick Reference Summary

  • Every journal entry must have equal debits and credits
  • Use DEALER: Debits increase Dividends, Expenses, Assets, Losses; Credits increase Capital, Revenue, Liabilities, Gains
  • Always include a narration (“Being” line)
  • Adjusting entries are made at period-end for accruals, deferrals, and depreciation
  • Closing entries transfer revenue and expense balances to retained earnings at year-end
  • Use the double-entry system: Assets = Liabilities + Equity must always balance

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