Double Entry Accounting

Part A

Double Entry Accounting

Every transaction affects atleast 2 accounts Although the fundamental basis behind all transactions is accounting equation, Accountants organize the elements of transactions into accounts that group similar items together

Types of Accounts

General Ledger

Personal accounts (natural or artificial persons)

Real accounts (properties and tangibles )

Nominal accounts (Income and expenses)

Particulars Building Purchased Purchases

Asset/ Liabilities/ Capital/ Expenses/ Losses/ Revenues/ Gain

R/N/P

Particulars Cash Interest received

Asset/ Liabilities/ Capital/ Expenses/ Losses/ Revenues/ Gain

R/N/P

Sales Carriage inward paid

Bank Account Carriage outward paid Drawings Sales Promotion expenses Bad Debts Discount received Capital brought in Bank Overdraft Outstanding Salary Interest Accrued

Interest Paid Commission Paid

Sales Returns Commission Received Discount allowed Insurance Premium Paid Bad Debts recovered Wages Paid Conveyance charges Loan account Prepaid Rent Interest received in advance

Particulars

S.No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
20

Asset/ Liabilities/ Real/ Capital/ Expenses/ Nominal/ Losses/ Revenues/ Gain Personal

Cash Account Payable Debtor Creditor Machinery Rent received Interest Paid Discount allowed Bank Loan Insurance Premium Telephone Bill Salaries Salaries due but not paid Bad Debts Sales Building Purchases Money invested in the business by the owner Mr. X, customer who buys on credit Mr. Y, a supplier from whom the business purchases on credit