Compound Journal Entries
What are Compound Journal Entries?
Compound journal entries are entries that involve three or more entries in the one transaction.
![cje 1](https://seeaccountingnow.online/wp-content/uploads/2021/08/cje-1.jpg)
How it Works
Most accounting entries involve one credit entry and one debit entry, only.
![cje 2](https://seeaccountingnow.online/wp-content/uploads/2021/08/cje-2.jpg)
The credit entry shows where money or value came from.
![cje 3.5](https://seeaccountingnow.online/wp-content/uploads/2021/08/cje-3.5.jpg)
Then the debit entry shows where that money or value was used or where it went to.
![cje 4](https://seeaccountingnow.online/wp-content/uploads/2021/08/cje-4.jpg)
Often, though, a transaction will involve more than just one debit and one credit entry.
![cje 5](https://seeaccountingnow.online/wp-content/uploads/2021/08/cje-5.jpg)
This could happen if a business pays an invoice for office supplies.
![cje 6](https://seeaccountingnow.online/wp-content/uploads/2021/08/cje-6.jpg)
To record details of the transaction, you would credit the cash account.
![cje 7](https://seeaccountingnow.online/wp-content/uploads/2021/08/cje-7.jpg)
This would show that money has come from the bank.
![cje 8](https://seeaccountingnow.online/wp-content/uploads/2021/08/cje-8.jpg)
After this, you need to show what the money was used for.
![cje 9](https://seeaccountingnow.online/wp-content/uploads/2021/08/cje-9-2.jpg)
In this case, the payment pertains to two expenses.
![cje 9](https://seeaccountingnow.online/wp-content/uploads/2021/08/cje-9-1.jpg)
So to record the other side of the transaction, you debit the office supplies account.
![cje 10](https://seeaccountingnow.online/wp-content/uploads/2021/08/cje-10.jpg)
This shows part of the payment was used for office supplies.
![cje 11](https://seeaccountingnow.online/wp-content/uploads/2021/08/cje-11.jpg)
At the same time, you also debit the freight account.
![cje 12](https://seeaccountingnow.online/wp-content/uploads/2021/08/cje-12.jpg)
This shows part of the payment was used to get the office supplies delivered.
![cje 13](https://seeaccountingnow.online/wp-content/uploads/2021/08/cje-13.jpg)