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Presented by Sean Fuller Bsc, MBA, ACCA Level 2, CIMA (Final Stage Equivalent)
AIM
By the end of the session you will develop an understanding and appreciation of the basic principles of Double-Entry Book-Keeping
OBJECTIVES
The principles of double entry book-keeping Debits and credits in double entry book-keeping Double entry for credit sales and credit purchases General principles of debits and credits
DIFFERENTIATED LEARNING
Identify specific needs: Point in session (e.g. for slower learners 5 in this session) Repeat more than once Extension Work: (e.g. for faster Point in session learners) 5 Give two task Materials Additional Explanation
CODE OF CONDUCT
During this lesson, the only rules we all need to observe are based around Respect for each other, no matter what their social background, culture, sex or difficulties are. This will manifest its-self in allowing everyone to speak and be heard, not using any stereotypical remarks about any social group etc. Think before you speak! Respect everyones point of view-except if it is liable to cause offence. Use of inappropriate language and speaking in your own language in the classroom is not acceptable. Thank you for your consideration
MAIN LESSON
Introduction
Debit
Credit
The dual aspect of double entry involves making two entries for every transaction in the books of account of the business
Cash Decrease Bank Balance Increase
Wages Paid
LEDGER ACCOUNT
DR Wages Account CR Date Details Folio AMT Date Details Folio AMT 5 Sept Bank CB121200
DEBIT AND CREDIT IN DOUBLE ENTRY BOOKKEEPING Every transaction involves one debit entry and one credit entry Debit entries are on the left of the appropriate account and credit entries are on the right Correct=right (credit = right hand side) and UK drivers, drive on the left. Work out which entry is the debit and which entry is the credit. There are two approaches: Conceptual Approach and Practical Approach
DOUBLE-ENTRY BOOK-KEEPING
The Conceptual Approach to Debits and Credits Debit Entry: the account which gains values or derives a benefit Credit Entry: the account which gives value or records some obligation Practical Approach 1 Sep 20-1 Sale of goods for 120 cheque received 5 Sep 20-1 Payment of wages of 1200 by cheque 6 Sep 20-1 Purchase of Goods for 3000, paid chq. 7 Sept20-1 Received loan of 5000 from Ian Wat. Paid chq. 9 Sept 20-1 Purchase of Computer costing 4000, paid chq
Cr.
Dr. Arco Engineering 20-1 20-1 10 Sep Sales 5000 10 Oct Bank
Cr.
5000
Sidbury Traders 2500 from NewLands Debit Purchases Account Credit Newland Supplies account
Cr.
Dr. Newland Supplies Cr. 20-1 20-1 12 Oct Bank 2,500 12 Sep Purchases 2,500
Dr. 20-1
NOTE EXAMPLES
CONCLUSION
The principles of double entry book-keeping Debits and credits in double entry book-keeping Double entry for credit sales and credit purchases General principles of debits and credits