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Double Entry
System 2
DR
CR
The Accounting System
to record transactions
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me!
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
Special
Journal
Journals
Ledger Accounts
Trial Balance
Adjustments
Prepare Simple Financial Statements
GENERAL
JOURNAL
Date
Particulars
Debit
Credit
$
$
(Debit)
Assets =
(Credit)
(Credit)
Owner’s 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
Cash in hand
Capital-John
John began business with cash $5000.
Debit
Credit
$
$
5000
5000
b)
John began business with a bank loan of
$8000 on 1 January 2000.
General Journal
Date
2000
Jan 1
Particulars
Cash in hand
Loan from bank
John began business with a bank loan
of $8000.
Debit
Credit
$
$
8000
8000
c)
John used $2000 to buy a motor vehicle
for business use on 16 March 2000.
General Journal
Date
2000
Mar 16
Particulars
Motor Vehicle
Cash
John bought a motor vehicle worth
$2000.
Debit
Credit
$
$
2000
2000
d)
John repaid bank loan of $1500 using cash
on 27 Oct 2000.
General Journal
Date
2000
Particulars
Oct 27
Loan from Bank
Cash
John repaid the bank loan.
Debit
Credit
$
$
1500
1500
e) John sold goods at $6000 on credit to
ABC Ltd on 26 November 2000.
General Journal
Date
2000
Nov 26
Particulars
Debtors (ABC Ltd)
Sales
Sales worth $6000 to ABC Ltd.
Debit
Credit
$
$
6000
6000
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
Credit
$
$
10,000
Stock
Trading
To record closing stock worth $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.
What do you
call this?
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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
Drawings
Cash
To record drawings of $1000 cash.
Debit
Credit
$
$
1000
1000
An Overview…
General
Special
Journal
Journals
Ledger Accounts
Trial Balance
Adjustments
Prepare Simple Financial Statements
4 SPECIAL
JOURNALS
Purchases Journal
Returns Outwards Journal
Sales Journal
Returns Inwards Journal
Reason for the purchases journal…
General Journal
Date
Particulars
2000
Mar 2
April 7
May 12
Debit
Credit
$
$
Purchases
Creditors-ABC
200
Purchases
Creditors-Peter
600
Purchases
Creditors-PCK
1000
200
600
1000
Purchases Journal…
Dr
Purchases
Cr
Creditors
Purchases Journal
Date
Particulars
2000
Cr
$
Mar 2
Creditors-ABC
200
April 7
Creditors-Peter
600
May 12
Creditors-PCK
1000
Total purchases to be debited
1800
Returns Outwards Journal…
Returns Outwards Journal
Date
Particulars
2000
Dr Creditors
Cr
Returns
Outwards
Dr
$
Mar 5
Creditors-SBS
100
April 9
Creditors-David
600
May 26
Creditors-PCK
500
Total returns outwards to be credited
1200
Reason for the Sales Journal…
General Journal
Date
Particulars
2000
Mar 2
April 7
May 12
Dr
$
Debtors-ABC
Sales
200
Debtors-Peter
Sales
600
Debtors-PCK
Sales
1000
Cr
$
200
600
1000
Sales Journal…
Dr Debtors
Cr Sales
Sales Journal
Date
Particulars
2000
Dr
$
Mar 2
Debtors-ABC
200
April 7
Debtors-Peter
600
May 12
Debtors-PCK
1000
Total sales to be credited
1800
Returns Inwards Journal…
Dr Returns
Inwards
Cr
Debtors
Returns Inwards Journal
Date
Particulars
2000
Cr
$
Mar 9
Debtors-ABC
100
April 9
Debtors-Peter
200
May 24
Debtors-PCK
300
Total returns inwards to be debited.
600
Tips to remember…
IN
Debit
Returns
Inwards
OUT
Credit
Returns
Outwards