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Double Entry System 2
DR
CR
http://xamiya.blogspot.com/
The Accounting System to record transactions

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Objectives
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 Adjustments Prepare Simple Financial Statements http://xamiya.blogspot.com/
GENERAL JOURNAL
Date Particulars Debit $ Credit $
(Debit)
(Credit)
(Credit)
Assets = Owners Equity + Liabilities
Debit
Credit
Credit
Credit
Debit
Debit
a)
John began business with cash in hand $5000 on 1 January 2000.

General Journal
Date 2000 Jan 1
Particulars
Debit $
Credit $
Cash in hand Capital-John
5000 5000
John began business with cash $5000.
b)
John began business with a bank loan of $8000 on 1 January 2000.

General Journal
Date 2000 Jan 1
Particulars
Debit $
Credit $
Cash in hand Loan from bank
8000 8000
John began business with a bank loan of $8000.

c)
John used $2000 to buy a motor vehicle for business use on 16 March 2000.
General Journal
Date 2000 Mar 16
Particulars
Debit $
Credit $
Motor Vehicle Cash
2000 2000
John bought a motor vehicle worth $2000.

d)
John repaid bank loan of $1500 using cash on 27 Oct 2000.

General Journal
Date 2000 Oct 27
Particulars
Debit $
Credit $
Loan from Bank Cash
1500 1500
John repaid the bank loan.
e) John sold goods at $6000 on credit to ABC Ltd on 26 November 2000.

General Journal Date 2000 Nov 26 Particulars Debit $ Debtors (ABC Ltd) Sales 6000 6000 Credit $
Sales worth $6000 to ABC Ltd.
f) Stock count was conducted and closing stock was found to be $10,000 on 31 Dec 2000.
General Journal Date 2000 Dec 31 Particulars Debit $ Stock Trading
To record closing stock worth $10,000.
Credit $
10,000 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.
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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
g) The owner withdrew cash $1000 for his personal use on 1 April 2000.
General Journal Date 2000 April 1 Particulars Debit $ Drawings Cash 1000 1000 Credit $
To record drawings of $1000 cash.
An Overview
General Journal Special Journals
Ledger Accounts
Trial Balance Adjustments Prepare Simple Financial Statements http://xamiya.blogspot.com/
4 SPECIAL JOURNALS
Purchases Journal Returns Outwards Journal Sales Journal Returns Inwards Journal
Reason for the purchases journal

General Journal Date 2000 Mar 2 April 7 Purchases Creditors-ABC Purchases Creditors-Peter Purchases Creditors-PCK
Particulars
Debit $ 200
Credit $ 200
600 600 1000 1000
May 12
Purchases Journal
Purchases Journal Date 2000 Mar 2 April 7 May 12 Creditors-ABC Creditors-Peter Creditors-PCK Total purchases to be debited
Dr Purchases Cr Creditors
Particulars
Cr $ 200 600 1000 1800
Returns Outwards Journal
Dr Creditors Cr Returns Outwards
Returns Outwards Journal Date 2000 Mar 5 April 9 May 26 Creditors-SBS Creditors-David Creditors-PCK Total returns outwards to be credited
Particulars
Dr $ 100 600 500 1200
Reason for the Sales Journal

General Journal Date 2000 Mar 2 April 7 Debtors-ABC Sales Debtors-Peter Sales Debtors-PCK Sales
Particulars
Dr $ 200
Cr $ 200
600 600 1000 1000
May 12
Sales Journal
Sales Journal Date 2000 Mar 2 April 7 May 12 Debtors-ABC Debtors-Peter Debtors-PCK Total sales to be credited
Dr Debtors Cr Sales
Particulars
Dr $ 200 600 1000 1800
Returns Inwards Journal

Returns Inwards Journal Date 2000 Mar 9 April 9 May 24 Debtors-ABC Debtors-Peter Debtors-PCK Total returns inwards to be debited.
Dr Returns Inwards Cr Debtors
Particulars
Cr $ 100 200 300 600
Tips to remember
IN
Debit Returns Inwards
OUT
Credit Returns Outwards

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Double Entry System 2

The Accounting System to record transactions

Trial Balance Adjustments Prepare Simple Financial Statements http://xamiya.blogspot.com/

Assets = Owners Equity + Liabilities

John began business with cash in hand $5000 on 1 January 2000.

Date 2000 Jan 1

Cash in hand Capital-John

John began business with cash $5000.

John began business with a bank loan of $8000 on 1 January 2000.

Date 2000 Jan 1

Cash in hand Loan from bank

John began business with a bank loan of $8000.

Date 2000 Mar 16

Motor Vehicle Cash

John bought a motor vehicle worth $2000.

John repaid bank loan of $1500 using cash on 27 Oct 2000.

Date 2000 Oct 27

Loan from Bank Cash

John repaid the bank loan.

e) John sold goods at $6000 on credit to ABC Ltd on 26 November 2000.

Sales worth $6000 to ABC Ltd.

To record drawings of $1000 cash.

Trial Balance Adjustments Prepare Simple Financial Statements http://xamiya.blogspot.com/

Reason for the purchases journal

600 600 1000 1000

Cr $ 200 600 1000 1800

Returns Outwards Journal

Dr Creditors Cr Returns Outwards

Dr $ 100 600 500 1200

Reason for the Sales Journal

600 600 1000 1000

Dr $ 200 600 1000 1800

Returns Inwards Journal

Dr Returns Inwards Cr Debtors

Cr $ 100 200 300 600

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