Common Double Entry Journals In The Purchases Cycle

1. Receiving a service without receiving an invoice

Dr Relevant Cost Account (P&L)
Cr Accruals (BS)

2. Receiving stock without receiving an invoice

Dr Stock Purchases (P&L)
Cr Accruals (BS)

3. Receiving fixed assets without receiving an invoice

Dr Fixed Assets (BS)
Cr Accruals (BS)

4. Receiving a service and an invoice.

Dr Relevant Cost Account (P&L)
Cr Trade Creditors (BS)

5. Receiving stock and an invoice.

Dr Stock Purchases (P&L)
Cr Accounts Payable (BS)

6. Receiving a fixed asset and an invoice.

Dr Fixed Assets (BS)
Cr Trade Creditors (BS)

7. Prepaying for a purchase

Dr Prepayments (BS)
Cr Cash (BS)

8. Receiving prepaid items

Dr Relevant Cost Account (BS or P&L)
Cr Prepayments (BS)

9. Paying An Invoice

Dr Accounts Payable (BS)
Cr Cash (BS)

Common Double Entry Journals In The Sales Cycle

In a chronological order.

1. Receiving A Payment In Advance For A Sale

Dr Cash (BS)
Cr Deferred Income (BS)

2. Making A Sale Without Invoicing

Dr Accrued Income (BS)
Cr Revenues (P&L)

3. Making A Sale With Invoicing

Dr Accounts Receivable (BS)
Cr Revenues (P&L)

4. Delivering The Service Related To A Prepaid Sale

Dr Deferred Income (BS)
Cr Sales (P&L)

This follows from 1.

5. Invoicing A Sale That Had Previously Been Accrued

Dr Accounts Receivable (BS)
Cr Accrued Income (BS)
This follows from 2.

6. Receiving Cash For A Sales Invoice

Dr Cash (BS)
Cr Accounts Receivable (P&L)

This follows from 3 or 5.