Journals or Rocket Science????
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I know it's not SUPPOSED to be rocket science but I cannot get my head around journals. I am really pickled. I am studying (yes it's a bank holiday weekend) for my Unit 3 Skills test next week and Journals are where my brain says, haha, you reckon..........<BR><BR>Any easy way to understand what goes where? I've convinced myself the suspense account is right but what about non-suspense and normal account journals, ie if £5000 was put into the purchase ledger but should of gone into sales, who gets debited and who gets credited?<BR>Sorry guys, I really am blitzed on this. <BR>Mandy
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Journals or Rocket Science????
Journals are used to complete the accounts. Can be used for opening entries, correction etc.<BR><BR>The journals don't seem to be the problem, it's the double entry? You've just gotta think about it and it will come to you.<BR><BR>In your example, if £5000 was put into purchases but should of went into sales you simply reverse them. So the original entry would of been:<BR><BR>CR £5000 Purchases<BR>DR £5000 Bank / Sales Ledger Control<BR><BR>The correction would be:<BR><BR>DR £5000 Purchases<BR>CR £5000 Sales<BR><BR>That's an awkward example actually, but it gives you the idea (hopefully). Try thinking of normal entries (in terms of debits & credits) for each account, e.g.:<BR><BR>Purchases Debit<BR>Purchase Returns Credit<BR>Sales Credit<BR>Sales Returns Debit<BR><BR>Expenses Debit<BR>Drawings Debit<BR><BR>Assets Debit<BR>Liabilities Credit<BR><BR>If you think of what each account is, it can sometimes help.<BR><BR>REAL is a way of thinking about it; REAL = Revenue, Expenditure, Assets, Liabilities<BR><BR>Sales = revenue (credit, as on payment bank is usually debited for the control a/c)<BR>Purchases = asset (stock for example)<BR>Telephone charges = expenditure (expense, debit)<BR>Long term loan = Liability (credit)<BR><BR>Hope that helps, losing track as I'm writing it ;-)0 -
Journals or Rocket Science????
You are right, it's not the journal, its the double entry bit. I think I may be looking too deep into it, so it's just a case of reversing out what was done in the first place and thinking logically? Would that be fair to say? <BR><BR>Many thanks for your help.0 -
Journals or Rocket Science????
Yes I'd say that's fair to say. <BR><BR>If an entry is wrong and you know it's wrong, think of what the right entry would of been and simply reverse it.<BR><BR>When I started this I sometimes did the T Accounts to work it out, as it's awkward to take in at the start with all the debits & credits.<BR><BR>0