Chapter 3
Recording: Double-entry book keeping
‘Old accountants never die, they just lose their balance.’
Anon
Learning Outcomes
After completing this chapter you should be able to:
- Outline the accounting equation.
- Understand double-entry bookkeeping.
- Record transactions using double-entry bookkeeping.
- Balance off the accounts and draw up a trial balance.
Go online to discover the extra features for this chapter at www.wiley.com/college/jones
Chapter Summary
- Double-entry bookkeeping is an essential underpinning of financial accounting.
- The accounting equation provides the structure for double-entry.
- Assets and expenses are increases in debits recorded on the left-hand side of the ‘T’ (i.e., ledger) account.
- Income and equity are increases in credits recorded on the right-hand side of the ‘T’ (i.e., ledger) account.
- Debits and credits are equal and opposite entries.
- Initial recording in the books of account using double-entry, balancing off and preparing the trial balance are the three major steps in double-entry bookkeeping.
- The trial balance is a listing of all the balances from the accounts.
- The debits and credits in a trial balance should balance.
REAL-WORLD VIEW 3.1 ...
Get Accounting, 3rd Edition now with O’Reilly online learning.
O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.