Compound Entry

Compound Entry
There can be entries that effect more than two accounts : such entry are called compound or combined entries.

Example :
Two simple journal entries are as under :

Salary a/c.                 6000
To cash a/c.                            6000
( salary paid in cash )

Rent a/c.                    12000
To cash a/c.                              12000
( rent paid in cash )


Compound entry :

Salary a/c.      Dr.       6000
Rent.   a/c.      Dr.       12000
To cash a/c.                               18000
( payment of salary and rent in cash ).


Note:
To make the compound entry it is necessary that the transaction must be of the same date and one account is common.