The Building Blocks of Every Balance Sheet
Before there was Tally. Before there was GST. Before there was TDS. There was the journal entry — the fundamental act of recording a financial transaction in a structured, verifiable way.
Every multinational's consolidated accounts, every CA's audit file, every MSME's tax return ultimately traces back to individual journal entries. If you get these wrong, everything built on top of them is wrong.
This guide covers the journal entries every fresher accountant must know — not just theoretically, but with the ability to pass them instantly from memory.
The Golden Rules of Accounting (Foundation)
All journal entries are governed by three golden rules:
| Account Type | Debit Rule | Credit Rule |
|---|---|---|
| Real Accounts (assets) | What comes in | What goes out |
| Personal Accounts (persons, banks) | The receiver | The giver |
| Nominal Accounts (expenses/income) | Expenses & losses | Incomes & gains |
Modern accounting also uses the DEAD CLIC mnemonic:
- DEAD: Debit → Expenses, Assets, Drawings
- CLIC: Credit → Liabilities, Income, Capital
15 Essential Journal Entries with Examples
1. Capital Introduction
Owner invests ₹5,00,000 cash into the business
- Debit: Cash A/c ₹5,00,000
- Credit: Capital A/c ₹5,00,000
2. Purchase of Goods (Cash)
Purchased goods worth ₹50,000 cash
- Debit: Purchases A/c ₹50,000
- Credit: Cash A/c ₹50,000
3. Purchase of Goods (Credit)
Purchased goods from Rajan Traders on credit ₹80,000
- Debit: Purchases A/c ₹80,000
- Credit: Rajan Traders A/c ₹80,000
4. Sales (Cash)
Sold goods for ₹1,20,000 cash
- Debit: Cash A/c ₹1,20,000
- Credit: Sales A/c ₹1,20,000
5. Sales (Credit)
Sold goods to ABC Company on credit ₹95,000
- Debit: ABC Company A/c ₹95,000
- Credit: Sales A/c ₹95,000
6. GST on Purchases (Input Tax Credit)
Purchased goods ₹1,00,000 + GST 18% = ₹1,18,000 (credit)
- Debit: Purchases A/c ₹1,00,000
- Debit: CGST Input A/c ₹9,000
- Debit: SGST Input A/c ₹9,000
- Credit: Supplier A/c ₹1,18,000
7. GST on Sales (Output Tax)
Sold goods ₹2,00,000 + GST 18% = ₹2,36,000
- Debit: Customer A/c ₹2,36,000
- Credit: Sales A/c ₹2,00,000
- Credit: CGST Output A/c ₹18,000
- Credit: SGST Output A/c ₹18,000
8. TDS Deduction (Receiving Payment)
Received professional fees ₹90,000 after 10% TDS deduction
- Debit: Bank A/c ₹90,000
- Debit: TDS Receivable A/c ₹10,000
- Credit: Professional Fees A/c ₹1,00,000
9. TDS Deduction (Making Payment)
Paid contractor ₹98,000 after 2% TDS on ₹1,00,000
- Debit: Contractor A/c ₹1,00,000
- Credit: Bank A/c ₹98,000
- Credit: TDS Payable A/c ₹2,000
10. Salary Payment
Paid salaries ₹2,50,000 by bank transfer
- Debit: Salaries A/c ₹2,50,000
- Credit: Bank A/c ₹2,50,000
11. Fixed Asset Purchase
Purchased machinery for ₹5,00,000 by cheque
- Debit: Machinery A/c ₹5,00,000
- Credit: Bank A/c ₹5,00,000
12. Depreciation
Depreciation on machinery @ 10% p.a. on ₹5,00,000 = ₹50,000
- Debit: Depreciation A/c ₹50,000
- Credit: Machinery A/c ₹50,000
13. Bank Loan Taken
Took bank loan of ₹10,00,000
- Debit: Bank A/c ₹10,00,000
- Credit: Bank Loan A/c ₹10,00,000
14. Interest on Loan
Paid loan interest ₹15,000
- Debit: Interest A/c ₹15,000
- Credit: Bank A/c ₹15,000
15. Bad Debt Written Off
Customer ABC Company declared insolvent, ₹20,000 written off
- Debit: Bad Debts A/c ₹20,000
- Credit: ABC Company A/c ₹20,000
How These Appear in Tally Prime
In Tally Prime, every journal entry is a voucher. Common voucher types:
- Payment Voucher (F5): Cash/bank payments
- Receipt Voucher (F6): Cash/bank receipts
- Sales Voucher (F8): Sales transactions
- Purchase Voucher (F9): Purchase transactions
- Journal Voucher (F7): Adjustments, depreciation, provisions
When you create vouchers in Tally, the software automatically posts debits and credits to the correct ledger accounts — but you must understand the underlying entry to verify accuracy.
Practice Until It's Automatic
The goal isn't to memorise these entries. It's to reach the point where you don't have to think about them — they flow naturally from understanding the transaction. That level of fluency comes from practice, not memorisation.
At Accountique Freshers Labz, our Basic Accounting course builds this muscle through hundreds of practical exercises using real business scenarios — so by the time you enter your first job, journal entries feel like second nature.