T accounts double entry rules

1. Double Entry Rules (Rules of Double Entry Bookkeeping)
Debit is on the Left. (Remember Driving on the Left side of the road in SG)
Acronym: PEARLS, DEAD CLIC, [Rule of Benefit - Every Asset is a Benefit]
• Bank statements are written from the Bank's Perspective, which is the exact opposite of Business Perspectives.
[+] Debit (Driving)….…Dr…(Destination) [-] Credit….…Cr (Source)
Increase Balance
Personal A/C: Receiver
Real A/C: What Comes In
Nominal A/C: Expenses
Decrease Balance
Personal A/C: Giver
A/C: What Goes Out
Nominal A/C: Incomes
P – Purchases R – Revenue: Sales Return
E – Expenses L – Liabilities (Debt)
Current: Trade Payables, Unearned Revenue, Taxes
Non-Current: Bonds Payable, Product Warranties
A – Assets (Benefit) (Debtors)
Current: Trade Receivables, Cash, Inventory
Non-Current (Tangible [Fixed] & Intangible):
Investments, Property, Plant, Equipment, Goodwill
S – Sales
DEAD Debit, Expenses, Assets, Drawings/ Withdrawals
DEAL Dividends, Expenses, Assets, Losses
CLIC Credit, Liabilities, Income, Capital
GIRLS Gains, Income, Revenue, Liabilities, Stockholders’ Equity
Rule of Benefit
– Every Asset is a Benefit
– Expenditure is made so as to obtain a Benefit
– Reduction in Benefit to the Business
Extract from Bookkeeping Treatise written by Fra Luca Pacioli in Year 1494.
Balance b/d Balance c/d