A journal entry with multiple lines of entry affecting several different ledgers (accounts) is commonly referred to as a complex entry. Many bookkeepers shy away from them as they feel intimidated by the difficulty involved and do not want to make an error.
What is combined journal entry?
A compound journal entry is an entry involving more than two accounts. In a compound journal entry, there are two or more debits, credits, or both. Rather than making separate journal entries for the same transaction, you can combine the debits and credits under one entry.
How to record a complex compound journal entry?
Withdrew goods from business for personal use 2,000. The following two methods will help in deriving greater information in case of recording complex compound journal entries. In both the cases, the postings in the ledger accounts involved in the complex compound entry vary. However, there will not be any change in the ledger account balance.
Which is an example of a complex compound entry?
The transactions involved in the complex compound entry relating to purchase of assets and liabilities of Mr. Max can be interpreted to form two or more simple compound entries to provide clear information as follows : [Being the value of assets of Mr. Max taken over by the business.]
Are there any journal entries that are difficult?
Actually, journal entries are not difficult but to understand the transactions may be difficult for you. When students see the journal entries of difficult transactions, they think that these journal entries are most difficult to solve. So, they don’t face with difficulties. This is not good.
What do you write on a combined journal entry?
Instead of listing out all the ledger accounts on the credit part of the entry, we write Miscellaneous Liabilities indicating that there are more than one credits involved in the transaction.
