Chapter 4

Introduction to
the Ledger Accounts
 Recording Transactions
Via the Double Entry System

ALL transactions eventually make their

way into Ledger Accounts (also
referred to as "T" Accounts). A Ledger
Account looks like this
 Recording Transactions
Via the Double Entry System

Date Details $ Date Details $

DEBIT SIDE CREDIT SIDE

 Recording Transactions
Via the Double Entry System

• The ledger account has two sides – a debit side

on the left and a credit side on the right. On
each side there are columns for the
transaction date, value, and details. It collects
all the transactions that are of a similar nature.
 Recording Transactions
Via the Double Entry System

For example
The bank account will contain all transactions
that either caused the bank balance to be
increased or decreased.
The motor vehicle account will contain all
transactions that either caused the cost of all
vehicles to go up or to go down.
 Recording Transactions
Via the Double Entry System

There are separate rules of double entry

for recording transactions related to:
Assets Capital
Expenses Liabilities
Revenue
 Recording Transactions
Via the Double Entry System
To record
Account type Increases Decreases
GO TO THE SIDE INDICATED
ASSETS DEBIT (DR) CREDIT (CR)

LIABILITIES CREDIT (CR) DEBIT (DR)

CAPITAL CREDIT (CR) DEBIT (DR)

REVENUE CREDIT (CR) DEBIT (DR)

EXPENSES DEBIT (DR) CREDIT (CR)