Accrued Income in Journal Proper

 

Meaning of Journal Proper

Journal proper refer to the special types of journals which occur occasionally.

These are also known by subsidiary journals.

There are certain types of transactions; which are not recorded in other subsidiary books but for the systematic recording.

Journal proper follows the rules of double entry system of bookkeeping.

Some examples of such transactions can be given as below:

Opening entries

Closing entries

Transfer entries

Adjustment entries (outstanding, prepaid, accrued, advance income)

Rectification entries

No special journal (free sample, loss by fire etc)

Rare transaction

  

Accrued Income or Accrued Revenue

Accrued revenue is earned but not received.

It is assume to receive in future.

It should be considered as receivable income for the year and recorded in asset.

It is based on accrual system of accounting.

The adjusting entry takes the following form:

 

PROBLEM: 7

Jaiswal Traders has these extracted data:

Interest received Rs 50,000 and still receivable or accrued Rs 20,000.

Required: (1) Journal entry; (2) Show in profit and loss account and balance sheet

SOLUTION

Journal Entries

In Jaiswal Traders

Date	Particulars		LF	Amount	Amount
	Cash account Accrued interest account           To Interest earned account  (Being- interest received and receivable)	Dr Dr		50,000 20,000	70,000

 

Profit and Loss Account

Particulars		Amount	Particulars		Amount
To Advance commission expired		30,000	By Interest received      Add: Accrued interest	50,000 +20,000	70,000

 

Balance Sheet

Liabilities		Amount	Assets		Amount
			Current asset: Accrued interest		20,000

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ACCOUNTING EQUATION http://tiny.cc/c89jkz

BASIC JOURNAL ENTRIES IN NEPALI http://tiny.cc/uaakkz

BASIC JOURNAL ENTRIES http://tiny.cc/8aakkz

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BANK RECONCILIATION STATEMENT (BRS) http://tiny.cc/q59jkz

DEPRECIATION http://tiny.cc/ugakkz

FINAL ACCOUNT: CLASS 11 http://tiny.cc/y89jkz

ADJUSTMENT IN FINAL ACCOUNT http://tiny.cc/keakkz

CAPITAL AND REVENUE http://tiny.cc/peakkz

SINGLE ENTRY SYSTEM http://tiny.cc/n19jkz

NON-PROFIT ORGANIZATION (NON-TRADING CONCERN http://tiny.cc/j09jkz

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GOSWARA VOUCHER (JOURNAL VOUCHER) http://tiny.cc/hcakkz

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PROBLEMS  AND  ANSWERS

 

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

Basic Problem: 7          ACCRUED INCOMES

Modi Traders has following extracted data:

(a) Interest receivable on investment $/₹/Rs 6,000.

(b) Commission earned but not received of Rs 11,000.

Required: (1) Journal entry; (2) Show in profit and loss account and balance sheet

 

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