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Double Entry Book-Keeping Part I

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Hsu Lae Nandar
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24 views

Double Entry Book-Keeping Part I

Uploaded by

Hsu Lae Nandar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Double Entry Book-keeping

DEAD CLIC

D = Debit

E = Expenses (Increase- Dr, Decrease = Cr)

A = Assets (Increase – Dr, Decrease = Cr)

D = Drawings (Increase – Dr, Decrease = Cr)

CLIC

C = Credit

L = Liabilities (Increase – Cr, Decrease – Dr)

I = Income (Increase – Cr, Decrease – Dr)

C = Capital (Increase – Cr, Decrease – Dr)


The Accounting Equation

Assets = Capital + Liabilities

Capital = 10 000

Loan = 3000

Motor vehicles as capital = 5 000

Capital Account
Date Details $ Date Details $
Bank 10 000
Motor Vehicles 5 000

Balance c/d 15 000

15 000 15 000
Balance b/d 15 000
Bank Account
Date Details $ Date Details $
Capital 10 000
Loan 3 000

Balance c/d 13 000

13 000 13 000
Balance b/d 13 000

Motor Vehicles
Date Details $ Date Details $
Capital 5 000

Balance c/d 5 000

5 000 5 000
Balance b/d 5 000

Loan Account
Date Details $ Date Details $
Bank 3 000

Balance c/d 3 000

3 000 3 000
Balance b/d 3 000

Assets = Capital

Assets = Capital + Liabilities

(13 000 + 5000) = 15 000 + 3 000

18 000 = 15 000 + 3 000

18 000 = 18 000
Types of Ledger

There are three types of ledger.

1. Purchases ledger (Trade payables account)


2. Sales Ledger (Trade receivables account)
3. General (Nominal) Ledger

Types of account

Personal account Impersonal account

Real Nominal
Account Account

(1 Jan 2020 – 31 Dec 2020)

Cash Purchase – 1 000

Dr = Purchase

Cr = Bank/ Cash

Credit Purchase (Mg Mg) = 1 000

Dr = Purchase

Cr = Mg Mg

Purchase returns / Returns outwards = 300

Dr = Mg Mg

Cr = Purchase returns

Carriage inwards = 200

Dr = Carriage inwards
Cr = Cash / Bank

Payment = 600

Dr = Mg Mg

Cr = Cash / Bank

Discount received = 100

Dr = Mg Mg (Trade Payables)

Cr = Discount received

(1 Jan 2020 – 31 Dec 2020)

Purchase
Date Details $ Date Details $
26 Feb Bank 1 000
16 June Mg Mg 1 000
31 Dec Balance c/d 2 000

2 000 2 000
1 Jan Balance b/d 2 000

Bank
Date Details $ Date Details $
Capital 5 000 Purchase 1 000
Carriage inwards 200
Bank 600
31 Dec Balance c/d 3 200

5 000 5 000
1 Jan Balance b/d 3 200
Mg Mg (Trade Payables)
Date Details $ Date Details $
Purchase returns 300 Purchase 1 000
Discount received 100
Bank 600

1 000 1 000

Purchase returns / Returns outwards


Date Details $ Date Details $
Mg Mg 300

Income Statement 300

300 300

Carriage inwards
Date Details $ Date Details $
Bank 200 Income Statement 200

200 200

Discount received
Date Details $ Date Details $
Mg Mg 100

Income Statement 100

100 100

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