What is Compound entry? Give an example of compound entry?

Whenever a journal entry involves more than two accounts, it is called Compound Entry. In a compound entry, there may be two or more accounts to be debited and only one to be credited or vice versa. Example of Compound Entry: - | 2001 | | Rs. | | --- | --- | --- | | Jan. 1 | Paid to Mohan Rs. 95 in full settlement of his account of Rs. 100 | | | Jan. 5 | Received from Ram Rs. 120 in cash and allowed him discount | 10 | | Jan. 7 | Paid Salary | 500 | | Jan. 7` | Paid Rent | 300 | | Jan. 7 | Paid Wages | 100 | **ANS. **JOURNAL ENTRIES | Date | Particulars | L.F. | Dr. | Cr. | | --- | --- | --- | --- | --- | | 2001 Jan. 1 | Mohan Dr. To Cash A/c To Discount A/c (For Payment to Mohan in full settlement of his account) | | 100 | 95 5 | | Jan. 5 | Cash A/c Dr. Discount A/c Dr. To Ram (for Receipt of money from ram and discount allowed him) | | 120 10 | 130 | | Jan. 7 | Salaries A/c Dr. Rent A/c Dr. Wages A/c Dr. To Cash A/c (For Payment of Salaries, Rent and wages) | | 500 300 100 | 900 |