Post on 19-May-2015
Double EntryDouble Entry
System 2System 2
DR CR
The Accounting System The Accounting System to record transactionsto record transactions
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ObjectivesObjectives
At the end of the lesson, students should be able to :
• know what are General Journal and Special
Journals.
• able to record simple business transactions
using the Double Entry Accounting System
into the General / Special Journals.
An Overview…
General
Journal
Special
Journals
Ledger Accounts
Trial Balance
Prepare Simple Financial Statements
Adjustments
GENERAL JOURNAL
Debit CreditDate Particulars
$ $
Debit Credit Credit
Credit Debit Debit
Assets = Owner’s Equity + LiabilitiesAssets = Owner’s Equity + Liabilities
(Debit) (Credit) (Credit)
Debit CreditDate Particulars
$ $
General Journal
a) a) John began business with cash in John began business with cash in
hand hand $5000 on 1 January 2000.$5000 on 1 January 2000.
2000
Jan 1 Cash in hand
Capital-John
5000
5000
John began business with cash $5000.
Debit CreditDate Particulars
$ $
General Journal
b) b) John began business with a bank John began business with a bank
loan of loan of $8000 on 1 January 2000.$8000 on 1 January 2000.
2000
Jan 1 Cash in hand
Loan from bank
8000
8000
John began business with a bank loan of $8000.
Debit CreditDate Particulars
$ $
General Journal
c)c) John used $2000 to buy a motor John used $2000 to buy a motor
vehicle vehicle
for business use on 16 March for business use on 16 March 2000. 2000.
2000
Mar 16 Motor Vehicle
Cash
2000
2000
John bought a motor vehicle worth $2000.
Debit CreditDate Particulars
$ $
General Journal
d)d) John repaid bank loan of $1500 John repaid bank loan of $1500
using cash using cash
on 27 Oct 2000.on 27 Oct 2000.
2000
Oct 27 Loan from Bank
Cash
1500
1500
John repaid the bank loan.
Debit CreditDate Particulars
$ $
General Journal
e)e) John sold goods at $6000 on credit John sold goods at $6000 on credit
to to
ABC Ltd on 26 November 2000.ABC Ltd on 26 November 2000.
2000
Nov 26 Debtors (ABC Ltd)
Sales
6000
6000
Sales worth $6000 to ABC Ltd.
Debit CreditDate Particulars
$ $
General Journal
f) Stock count was conducted and f) Stock count was conducted and
closing stock closing stock
was found to be $10,000 on 31 Dec was found to be $10,000 on 31 Dec 2000.2000.
2000
Dec 31 Stock
Trading
10,000
10,000
To record closing stock worth $10,000.
It is common for the owner to draw money or goods from the firm for personal use anytime.
According to the Accounting Entity concept, we must record the event even though he is the owner of the firm.
What do you call this?Click me!
It is common for the owner to draw money or goods from the firm for personal use anytime.
According to the Accounting Entity concept, we must record the event even though he is the owner of the firm.
DRAWINGS
Debit CreditDate Particulars
$ $
General Journal
g)g) The owner withdrew cash $1000 The owner withdrew cash $1000
for his for his
personal use on 1 April 2000.personal use on 1 April 2000.
2000
April 1 Drawings
Cash
1000
1000
To record drawings of $1000 cash.
An Overview…
General
Journal
Special
Journals
Ledger Accounts
Trial Balance
Prepare Simple Financial Statements
Adjustments
4 SPECIAL JOURNALS
Purchases Journal
Returns Outwards Journal
Sales Journal
Returns Inwards Journal
CreditDate Particulars
$
General Journal
Reason for the purchases journal…
Debit
2000
Mar 2 Purchases 200Creditors-ABC 200
April 7 Purchases 600Creditors-Peter 600
May 12 Purchases 1000Creditors-PCK 1000
$
Purchases Journal…
CrDate Particulars
$
Mar 2 Creditors-ABC 200
Purchases Journal
April 7 Creditors-Peter 600
May 12 Creditors-PCK 1000
2000
Dr Purchases
Cr Creditors
1800Total purchases to be debited
Dr Date Particulars
$
Returns Outwards Journal…
Mar 5 Creditors-SBS 100
April 9 Creditors-David 600
May 26 Creditors-PCK 500
2000
Dr Creditors Cr
Returns
OutwardsReturns Outwards Journal
1200Total returns outwards to be credited
CrDate Particulars
$
Reason for the Sales Journal…
2000
Mar 2 Debtors-ABC 200Sales 200
April 7 Debtors-Peter 600Sales 600
May 12 Debtors-PCK 1000Sales 1000
$
Dr
General Journal
Dr Date Particulars
$
Dr Debtors Cr Sales
Sales Journal…
Sales Journal
Mar 2 Debtors-ABC 200
April 7 Debtors-Peter 600
May 12 Debtors-PCK 1000
2000
1800Total sales to be credited
Cr Date Particulars
$
Returns Inwards Journal… Dr Returns Inwards
Cr Debtors
Returns Inwards Journal
Mar 9 Debtors-ABC 100
April 9 Debtors-Peter 200
May 24 Debtors-PCK 300
600Total returns inwards to be debited.
2000
IN OUT
Debit ReturnsInwards
Credit Returns
Outwards
Tips to remember…