Question

what is compound entry? Give an example. Explain in 100-150 words

Answer 1

Answer :

Compound Entry Which means​ -

A compound Journal Entry is a bookkeeping Entry which impacts in excess of two Account heads. A Simple journal entry has one Debit and one credit while a compound Journal Entry incorporates at least one Debit and additionally credits than a Simple Journal Entry. A compound Journal entry may combine two or more debits and a credit, or a debit and two or more credits, or two or more of both debits and credits.

A compound entry is basically a combination of two or more journal entries however as opposed to recording various Simple journal entries it is smarter Way to record Journal entries of single bookkeeping occasion as a compound entry since it spares time and keeps related Debits and credits in a single place.

Example for Compound Entry -

On Jan 1, 2015 Company AB purchased a Machine costing $1,000 to a supplier and issued a check of $3,400 .The excess amount fully settles a previous amount owned by the company to the supplier.

Compound Entry Will be :