General Knowledge Center
Explore our verified library of General transactions. Every entry is reviewed for IFRS compliance and real-world accuracy by our technical accounting team.
How to Record Prepaid Rent Expense
A guide on recording the initial cash payment and the monthly adjusting entry for prepaid rent.
Journal Entry for Accrued Payroll
Recording wages earned by employees but not yet paid at the end of the accounting period.
Buying a Company Vehicle with a Loan
Recording a fixed asset purchase with a cash down payment and a bank loan.
Allowance for Doubtful Accounts (Bad Debt)
Creating a provision for accounts receivable that may not be collected at year-end.
Bank Reconciliation: Interest Earned
Adjusting the general ledger for interest income reported on a bank statement.
Replenishing the Petty Cash Fund
The entry required to record expenses paid out of petty cash and bring the fund back to its original balance.
Sale of Fixed Asset at a Gain
How to remove an asset from the books and record a profit on the sale.
Inventory Write-Down to Net Realizable Value
Adjusting inventory value when the market price drops below the cost (LCM/NRV rule).
Adjusting Entry for Unearned Revenue
Recognizing revenue that was previously collected as an advance payment.
Bank Service Charges & Transfer Fees
Recording monthly maintenance or wire transfer fees deducted by the bank.
Direct Write-Off of Uncollectible Account
Recording a loss when a specific customer's balance is confirmed as uncollectible.
Restricted Grant Revenue (Non-Profit)
Recording a donation that must be used for a specific project or timeframe.
Cash Dividends Received on Investment
Recording income from dividends paid by a company in which you own shares (Cost Method).
Recovery of Previously Written-Off Bad Debt
Recording cash received from a customer whose balance was already written off in a prior period.
Establishing a Petty Cash Fund
Setting up an initial float for small office expenses (Imprest System).
Accruing Monthly Utilities (Electricity/Water)
Recording estimated utility costs at month-end before the actual bill arrives.
Purchase Returns and Allowances
Returning defective raw materials to a supplier for a full credit.
Payment of Previously Declared Dividends
The actual cash outflow to shareholders following the declaration date.
Monthly Amortization of Prepaid Insurance
The adjusting entry to move one month of coverage from assets to expenses.
Receipt of Advance Rent (Unearned)
Recording cash received from a tenant for the next 6 months of rent.
Issuing a Salary Advance to Employee
Recording a short-term loan given to an employee against their next paycheck.
Accruing Annual Employee Bonuses
Recording the expense for bonuses earned in the current year but paid in the next year.
Purchase of Land with Broker Commissions
Capitalizing all costs required to get an asset ready for use.
Accruing Monthly Loan Interest
Recording interest that has built up on a bank loan but hasn't been paid yet.
Customer Overpayment (Credit Balance)
Handling a situation where a customer pays more than the invoice balance.
Monthly Bank Loan Repayment
Recording a standard loan installment consisting of both principal and interest.
Amortization of Trademarks/Patents
The monthly expense recording for the gradual expiration of an intangible asset.
Payment of Office Security Deposit
Recording the refundable deposit paid to a landlord at the start of a lease.
Receipt of Client Retainer Fee
Recording an upfront payment from a client for future legal or consulting services.
Sale of Fixed Asset at a Loss
Removing an asset from the books when it is sold for less than its net book value.
Utilization of Bank Overdraft
Recording a negative bank balance when a company uses its credit facility for payments.
Petty Cash Overage (Extra Cash Found)
Adjusting the petty cash fund when the physical count is higher than the records.
Reversal of Inventory Write-Down (IFRS)
Increasing the value of inventory back up if its market price recovers (Not allowed under US GAAP, but allowed under IFRS).
Monthly Rent Expense Recognition
Moving one month of rent from the prepaid asset to the expense account.
Accruing Employee Overtime
Recording extra hours worked by staff that will be paid in the following month's payroll.
Owner's Personal Expense Paid by Business
Recording a transaction where the owner used the company bank account for a personal bill.
Opening a Letter of Credit (L/C) Fee
Recording the bank fees associated with opening an L/C for international trade.
Recovery of Written-Off Debt (Direct Reversal)
Reinstating a customer account and recording the cash received after a direct write-off occurred.
Insurance Claim Settlement Received
Recording the cash received from an insurance company after a fire or theft loss.
Employee Travel Allowance (Per Diem)
Paying a fixed daily rate to an employee for business travel expenses.
Capitalizing a Major Asset Overhaul
Recording a significant repair that extends the life of a machine by several years.
Reversal of Excess Bad Debt Provision
Reducing the allowance for doubtful accounts when collections are better than expected.
Initial Partnership Capital Contribution
Recording the initial cash and equipment investment by two partners to start a new business.
Cash Margin for Bank Guarantee (LG)
Recording the cash frozen by the bank as collateral for issuing a Letter of Guarantee (common in Jordan tenders).
Recruitment Agency Success Fee
Recording the fee paid to a headhunter after successfully hiring a new manager.
Barter Exchange (Services for Services)
Recording a transaction where you provide marketing services in exchange for legal advice (no cash involved).
Accrued Interest on Bank Term Deposit
Recording interest earned on a 6-month fixed deposit that hasn't been paid into the account yet.
Release of Restricted NGO Funds
Moving funds from 'Restricted' to 'Unrestricted' revenue after project milestones are met.
Scrapping a Fully Depreciated Asset
Removing an asset and its accumulated depreciation from the books when it is thrown away (Zero book value).
Employee Loan Repayment via Payroll
Recording the monthly deduction from an employee's salary to pay back a company loan.
End of Service Benefit (EOSB) Payout
Recording the actual cash payment to an employee who has resigned or been terminated.
Employee Training & Certification Cost
Paying for an employee's professional exam (e.g., CPA/CMA) or training course.
Donating a Fixed Asset (e.g., Laptop) to Charity
Removing an old company laptop from the books and recording a donation expense.
Real Estate Brokerage Commission
Recording the commission paid to an agent for successfully selling a property.
Reversal of Overestimated Audit Fees
Adjusting the books when the actual audit bill is lower than the amount previously accrued.
Employee Severance / Termination Pay
Recording a one-time lump sum payment for a redundant position (separate from EOSB).
Asset Exchange (Equipment for Vehicle)
Trading an old machine for a company car, including a cash adjustment.
Charitable Pledge Accrual
Recording a legal commitment to donate money to a charity before the cash is sent.
Monthly Accrual for Employee Vacation
Recording the liability for earned but unused vacation days at month-end.
Interest Charged on Overdue Customer Accounts
Recording a finance charge applied to a customer's balance because they paid past the due date.
Annual IT Support/Maintenance Contract
Paying upfront for a 1-year technical support or hardware maintenance agreement.
Bank Overdraft Interest & Fees
Recording the finance charges applied by the bank for using an overdraft facility.
Correction of Bank Deposit Error
Adjusting the books when the bank incorrectly recorded a $1,000 deposit as $100.
Event Ticket Sales (Gross vs Net)
Recording ticket sales revenue where the platform (like Eventbrite) takes a fee before payout.
Employee Relocation Allowance
Paying for a new hire's moving costs and flights to join the company.
Initial Franchise Fee Payment
Paying the one-time upfront fee to a franchisor to open a new location (e.g., McDonald's or Starbucks sub-franchise).
Capitalizing Leasehold Improvements
Recording the cost of permanent renovations (flooring, walls) made to a rented office space.
Bank Loan Processing/Origination Fee
Recording the upfront fee charged by a bank to set up a new commercial loan.
Petty Cash Theft / Unexplained Shortage
Recording a loss when the physical petty cash count is missing money that cannot be accounted for by receipts.
Prepaid Corporate Gym Membership
Paying for a 1-year fitness membership for employees as part of a wellness program.
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