Accounting, 3rd Edition

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.

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