2. Revision of accounting
systems and double entry
bookkeeping
• Recording and summarising
• Assets and Liabilities
• Double entry
• Posting from day books
3. Recording and
summarising
Principles of Bookkeeping.
• Single Entry Bookkeeping
• The Concept of Double Entry
Bookkeeping
• The Basic rules and disciplines of
double entry bookkeeping
4. Recording and summarising
Single entry bookkeeping
• Involves writing down each entry
once. I.e. list of income and
expenditure.
• Can prove figures by agreeing cash
and bank
5. Single entry bookkeeping
Limitations are:
• Errors may not be noticed.
• Money owing to the organisation is
not shown.
• Money owed by the organisation is
not shown.
• Long-term assets are not shown.
6. Recording and summarising
Double entry bookkeeping
• Every transaction is written into the books
twice, once as a credit and once as a debit.
• Advantages are:
– Control. The total of debits equal the total of
the credits.
– A complete view of the financial status of the
organisation can be taken.
7. Newton’s Third Law
Book keeping’s First Rule!
Every Debit Must have a credit!
8. Double entry
bookkeeping
Disciplines of double entry bookkeeping
• Debit on the left.
• Credit on the right.
• For every debit there must be a
credit.
16. Quick Test 1
Asset or Liability?
• Office Machinery • Asset
• A loan from the bank • Liability
• Fixtures and fittings • Asset
• Motor vehicles • Asset
• Money owed to a supplier • Liability
for goods
17. Quick test 2
Asset or Liability?
• Premises • Asset
• Creditors for goods • Liability
• Stock of goods • Asset
• Debtors • Asset
• Cash in hand • Asset
• Bank overdraft • Liability
• Machinery • Asset
