Double Entry Accounting


Lesson One: Double Entry Accounting (This lesson)
Lesson Two: The Basic Accounting Equation: Another Viewpoint
Lesson Three: Debits and Credits (What they really mean)
Lesson Four: Equity Example (The owner investing in his business)
Lesson Five: Liability Example (Taking out a loan)
Lesson Six: Asset Example (Buying an asset)
Lesson Seven: Drawings Example (Withdrawing cash from the business for personal use)
Lesson Eight: Income Example (Income received in cash)
Lesson Nine: Accrued Income - part 1 (Income that is owing to you)
Lesson Ten: Accrued Income - part 2 (Getting paid by a debtor - someone who owes you)
Lesson Eleven: Expenses Example (Cash expenses)
Lesson Twelve: Accrued Expenses - part 1 (Expenses you owe to another)
Lesson Thirteen: Accrued Expenses - part 2 (Paying off debts)






WARNING: If you're struggling with debits and credits and you've come straight to this page (without checking out some of the earlier sections), you may still run into some trouble... It's highly, highly recommended you backtrack a bit, otherwise this section won't make complete sense...

First start with the previous section on Basic Accounting Transactions There you'll go through each type of transaction and gain a thorough understanding of how each transaction affects the Basic Accounting Equation, which, in turn, is one of the lessons from the section Basic Accounting Concepts, (the first section of this site - and a section I recommend to everyone, not just beginners).

Use your judgement and choose carefully... and remember to always go back to an earlier section if you're getting confused!

When we first started we asked the question, What is Accounting? and learnt that it is a system of recording information about a business.

Well, this system has a specific name. And that name is the double entry system of accounting.

Balance the books!

Double entry literally means two entries. And we literally make two entries. In the lessons in this section I will show you how we make these two entries, what a debit and a credit really are, and how these things all tie in with the Basic Accounting Equation.

Before we head into the meat of this section, we're going to take a look at an alternative viewpoint of the Basic Accounting Equation.

This short but powerful lesson will provide you with even greater certainty on the basic accounting equation, and connects this key equation with the concept of two entries in our double-entry system, as well as with the upcoming lesson on Debits and Credits (what they really mean). This second lesson shows that it's really much simpler than you think.

After we have a clear understanding of what these two overly complicated terms really mean, and how they relate to the basic equation, we're going to start applying debits and credits ... to the same transactions we went through before with George's Catering.




Lesson One: Double Entry Accounting (This lesson)
Lesson Two: The Basic Accounting Equation: Another Viewpoint
Lesson Three: Debits and Credits (What they really mean)
Lesson Four: Equity Example (The owner investing in his business)
Lesson Five: Liability Example (Taking out a loan)
Lesson Six: Asset Example (Buying an asset)
Lesson Seven: Drawings Example (Withdrawing cash from the business for personal use)
Lesson Eight: Income Example (Income received in cash)
Lesson Nine: Accrued Income - part 1 (Income that is owing to you)
Lesson Ten: Accrued Income - part 2 (Getting paid by a debtor - someone who owes you)
Lesson Eleven: Expenses Example (Cash expenses)
Lesson Twelve: Accrued Expenses - part 1 (Expenses you owe to another)
Lesson Thirteen: Accrued Expenses - part 2 (Paying off debts)



Read Other Questions Relating to This Lesson
(along with their answers)

Click below to see questions and solutions on this same topic from other visitors to this page...

Entry for Cheque Received? 
Q: What is the entry for the following: Received cheque from a debtor Rs1,00,000 (this means 100,000 Rupees - Indian currency)

Examples of Incomes 
Q: Can someone give me some examples of incomes?

Carriage Inward 
Q: Carriage inward comes under which category? A: Well, first let's make sure we understand what "carriage" is - carriage simply means transport …

Introduction of Asset in the Business 
Becks introduced his van into the business $30000. What is the amount to enter in capital account if it was 36000 on 1 jan?

Owner's Equity Decrease? 
Q: If an owner withdraws $200 of office supplies for personal use is this a decrease in office supplies AND a decrease in owner's equity? A: Yes …

Accrued expenses paid but not previously recorded 
Q: How are wages paid but not previously recorded accounted for? A: As far as I understand it would be the same as if one were just recording paying …

Best Way to Study Accounting? 
Q: What is the best way to learn accounting? A: I published an article a while back in one of our free newsletters. Here it is again, it's called …

Accrued Expenses and Revenue 
Q: Does accrued expenses and revenue need to be closed at the end of the accounting period?

Accounting Treatment for Carriage Inward 
Q: What is the accounting treatment for carriage inward? A: Carriage inward is an expense . The journal entry for this would be: Dr Carriage …

Double Entry Accounting 
Q: What is double entry accounting and who introduced double entry? A: The answer to your first question is fully explained in the lessons in the …

Accounts Receivable
vs.
Accounts Payable
 
Q: Accounts Receivable vs. Accounts Payable? A: The answer to this short question is to define the two terms and see how they differ. Accounts …



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