Compound Entry, Opening Entry, Capital type Accounts

Compound Entry:

                    Whenever two or more transactions of the same nature (i.e. transactions where either the account to be debited of the account to be credited is common) take place on the same date a composite or compound or  combined journal entry may be passed for them instead of passing a separate journal entry for each of them. It should be noted that the amount in debt column equals to the amount in credit column, based on double entry system of book-keeping. One amount in the debit column must be equal to two or more amounts in the credit column or one amount in the credit column equals to two or more amounts in the debit column.

Opening Entry:

                    At the time of beginning of a new accounting year, every businessman has to write and keep a new set of books of accounts. The accounts not closed in the previous accounting period are recorded in a new set of books with an entry called “Opening entry”. All the assets accounts are debited and liabilities accounts are credited. The difference between the assets and liabilities is to be credited to the capital Account.

Capital type Accounts:

                     The capital type accounts are those accounts whose effect is not limited to a particular financial year but carries over to future financial years also.

Revenue type accounts:  

                    When the effect of income and expenditure is limited to a particular financial year, it is known as ‘Revenue type of account’.

Eg: Commission Received, Interest Received, rent paid,                          

       Salaries paid etc.., its classified two types

1)    Income A/C

2)    Expenses A/C