The narration is the explanation of the entry and facilitates quick understanding. The length of the narration depends on the complexity of the transaction and whether management wants the journal itself to contain all relevant information. Most often narration are in brief.

Compound Entry: When more than two accounts are involved in a transaction and the transaction is recorded by means single journal entry instead of passing several journal entries, such single journal entry is termed as 'Compound Journal Entry'. A compound journal entry may also be passed if there are more transactions of the same nature, taking place on the same date. It may be recorded in the following three ways:

a) by debiting one account and crediting two or more accounts; or

b) by debiting two or more accounts and crediting one account; or

c) by debiting several accounts and crediting several accounts.


         Example:- Paid Rs. 920 to Mr. Gopal in full settlement of his account of Rs. 1,000.

                  Gopal A/c             Dr.                 1,000

                      To Cash A/c                                                          980

                      To Discount received A/c                                    20


OPENING ENTRY:-- A journal entry by means of which the balances of various assets, liabilities and capital appearing in the balance sheet of previous accounting period are brought forward in the books of current accounting period is known as ‘Opening Entry’.

While passing an opening entry. All those accounts which denote what the business possesses (assets) are debited and all the accounts showing amounts due by the business (liabilities) are credited.


Þ If capital is not given, it can be easily found out by deducting liabilities from assets. Opening entries are the following:


     Cash Account - Dr.

     Cash at Bank Account - Dr.

     Sundry Debtors Account - Dr.

     Stock Account - Dr.

                To Sundry Creditors Account

                To Capital Account


▪ The opening entry is made in the journal. At the end of the trading period, closing entries are made, the object being to close the books.

Latest Blogs

Who is The Best Faculty For Accounts?

You need the Best Faculty For Accounts, CA Exam Preparation, so that you can pass your exam with Flying Colors without wasting a single minute of your Precious Time. A Good Faculty will not only help you clear your exam but also help you achieve the highest rank Possible, which proves to be surely a great advantage in Job Placement after completing CA.

Best Video Lectures for Operations Management & Strategic Management (OMSM) CMA Inter Group-2

OMSM Operations Management and Strategic Management. Get your Video Lectures Operations Management and Strategic Management from COC Education

Top Reviews

Introduction to Statistics for CA Foundation

Introduction to Statistics for CA Foundation Business Mathematics, Logical Reasoning and Statistics is designed as per latest CA Foundation syllabus for Paper 3 to provide a firm grounding in the principles, techniques and practice. The book adopts self-study approach and has been written in student-friendly manner. With a blend of conceptual learning and problem-solving approach, it offers in-depth understanding of the basic mathematical and statistical tools. #introductiontostatistics

Chapter X of Companies Act 2013

Chapter X of Companies Act 2013 The company shall place the matter relating to such appointment for ratification by members at every annual general meeting. ... Under the Act, the provisions for rotation of auditors in the listed Company & certain other class of Companies, have been provided for. #chapterxofcompaniesact2013

Relevant sections under the Companies Act, 2013 dealing with fraud and false statements

Relevant sections under the Companies Act, 2013 dealing with fraud and false statements The new parent corporate law “The Companies Act 2013” is mostly ... I am limiting my write-up to the provisions to the Act, and I request the readers to refer relevant rules, if any, before ... in the 2013 Act is the Section 447 dealing with “Punishment for fraud”. ... Section 448

What is Corporate Image

What is Corporate Image A corporate identity or corporate image is the manner in which a corporation, firm or business enterprise presents itself to the public. The corporate identity is typically visualized by branding and with the use of trademarks, but it can also include things like product design, advertising, public relations etc #WhatisCorporateImage

What is Energy Audit

What is Energy Audit An energy audit is an inspection survey and an analysis of energy flows for energy conservation in a building. It may include a process or system to reduce the amount of energy input into the system without negatively affecting the output. #whatisenergyaudit