{"id":132,"date":"2020-09-09T09:06:00","date_gmt":"2020-09-09T08:06:00","guid":{"rendered":"https:\/\/www.thetrainingplace.org\/blog\/2020\/09\/09\/double-entry-for-beginners-part-1\/"},"modified":"2024-11-22T15:07:45","modified_gmt":"2024-11-22T15:07:45","slug":"double-entry-for-beginners-part-1","status":"publish","type":"post","link":"https:\/\/www.thetrainingplace.org\/blog\/2020\/09\/double-entry-for-beginners-part-1\/","title":{"rendered":"DOUBLE ENTRY FOR BEGINNERS – PART 1"},"content":{"rendered":"

DOUBLE ENTRY FOR BEGINNERS – PART 1<\/span><\/u><\/b><\/p>\n

SALES SCENARIOS- PART 1<\/span><\/u><\/b><\/p>\n

Financial Accounts are built on the double entry principle which states that:<\/span><\/p>\n

FOR EVERY DEBIT ENTRY, THERE MUST BE A CORRESPONDING CREDIT ENTRY; <\/b><\/p>\n

So, in posting any transaction into your accounts, you always need to identify which account needs to be debited and which account needs to be credited.<\/p>\n

A common acronym used to learn the double entry is DEAD\/ CLIC<\/span><\/b><\/p>\n

DEAD\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 CLIC<\/b><\/p>\n

Debit: Expenses, Assets, Drawings\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>Credit: Liabilities, Income, Capital<\/b><\/p>\n

DEBIT TRANSACTIONS\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span>CREDIT TRANSACTIONS<\/b><\/p>\n

\u00a0<\/b>If any of these are increasing, If any of these are increasing, <\/span><\/i><\/b>you will need to debit the\u00a0<\/span><\/i><\/b>account you will need to credit the account\u00a0<\/span><\/i><\/b><\/i>and vice versa, if it is decreasing and vice versa, if it is decreasing<\/span><\/i><\/b><\/b>\u00a0<\/i><\/b><\/p>\n

Let\u2019s imagine some scenarios:<\/span><\/b><\/p>\n

1. If a customer buys products worth \u00a3230 from you and doesn\u2019t pay immediately, i.e. credit sale. In such situation, a sale has taken place and a debtor has been established since the customer owes you. Invariably, sales have increased, as you have sold products and debtors (asset) has also increased.<\/span>\u00a0<\/span><\/p>\n

Accounts affected:<\/span><\/p>\n

<\/p>\n