7.5 Situation 2 - Converting to a double-entry system
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VCE Accounting Unit 3. Video of this presentation can be found on my YouTube channel here https://www.youtube.com/channel/UCf5jyuJoYwie8tWfvjEc0zg.
![© Michael Allison. Author’s permission required for external use.
Single-Entry…
Another situation is where a business has been running for a number of years using
single-entry accounting (Year 11 = no General Ledger) and wants to move to double-
entry accounting
E.g. On 17 March firm has been using single-entry accounting for 5 years and wants to
move to double-entry accounting. It has the following assets and liabilities:
7.5 SITUATION #2
CONVERTING TO A DOUBLE-ENTRY SYSTEM
Cash $4,000
Double-Entry…
How will these items
be converted into a
Double-Entry System?
[A]
[A]
[A]
[L]
Debtor – Crosby $1,000
Debtor – Stills $2,000
Stock $18,000
Shop fittings $24,000
GST liability $1,000
Creditor – Young $900
Creditor – Tuck $4,000
Loan $10,000
[A]
[A]
[L]
[L]
[L]](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
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7.5 Situation 2 - Converting to a double-entry system
- 1. 7.5 SITUATION #2: CONVERTING TO A DOUBLE-ENTRY SYSTEM
- 2. © Michael Allison. Author’s permission required for external use. Single-Entry… Another situation is where a business has been running for a number of years using single-entry accounting (Year 11 = no General Ledger) and wants to move to double- entry accounting E.g. On 17 March firm has been using single-entry accounting for 5 years and wants to move to double-entry accounting. It has the following assets and liabilities: 7.5 SITUATION #2 CONVERTING TO A DOUBLE-ENTRY SYSTEM Cash $4,000 Double-Entry… How will these items be converted into a Double-Entry System? [A] [A] [A] [L] Debtor – Crosby $1,000 Debtor – Stills $2,000 Stock $18,000 Shop fittings $24,000 GST liability $1,000 Creditor – Young $900 Creditor – Tuck $4,000 Loan $10,000 [A] [A] [L] [L] [L]
- 3. © Michael Allison. Author’s permission required for external use. Single-Entry… Cash $4,000[A] [A] [A] [L] Debtor – Crosby $1,000 Debtor – Stills $2,000 Stock $18,000 Shop fittings $24,000 GST liability $1,000 Creditor – Young $900 Creditor – Tuck $4,000 Loan $10,000 [A] [A] [L] [L] [L] General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit Mar 17 Cash [A] 4000 Debtors control [A] 3000 Debtor – Crosby 1000 Debtor – Stills 2000 Stock [A] 18000 Shop fittings [A] 24000 GST [L] 1000 Creditors control [L] 4900 Creditor – Young 900 Creditor – Tuck 4000 Loan [L] 10000 Capital [OE] Converting to a double- entry accounting system (Memo 1) General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit Mar 17 Cash [A] 4000 Debtors control [A] 3000 Debtor – Crosby 1000 Debtor – Stills 2000 Stock [A] 18000 Shop fittings [A] 24000 GST [L] 1000 Creditors control [L] 4900 Creditor – Young 900 Creditor – Tuck 4000 Loan [L] 10000 Capital [OE] Converting to a double- entry accounting system (Memo 1) General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit Mar 17 Cash [A] 4000 Debtors control [A] 3000 Debtor – Crosby 1000 Debtor – Stills 2000 Stock [A] 18000 Shop fittings [A] 24000 GST [L] 1000 Creditors control [L] 4900 Creditor – Young 900 Creditor – Tuck 4000 Loan [L] 10000 Capital [OE] Converting to a double- entry accounting system (Memo 1) General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit Mar 17 Cash [A] 4000 Debtors control [A] 3000 Debtor – Crosby 1000 Debtor – Stills 2000 Stock [A] 18000 Shop fittings [A] 24000 GST [L] 1000 Creditors control [L] 4900 Creditor – Young 900 Creditor – Tuck 4000 Loan [L] 10000 Capital [OE] Converting to a double- entry accounting system (Memo 1) General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit Mar 17 Cash [A] 4000 Debtors control [A] 3000 Debtor – Crosby 1000 Debtor – Stills 2000 Stock [A] 18000 Shop fittings [A] 24000 GST [L] 1000 Creditors control [L] 4900 Creditor – Young 900 Creditor – Tuck 4000 Loan [L] 10000 Capital [OE] Converting to a double- entry accounting system (Memo 1) General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit Mar 17 Cash [A] 4000 Debtors control [A] 3000 Debtor – Crosby 1000 Debtor – Stills 2000 Stock [A] 18000 Shop fittings [A] 24000 GST [L] 1000 Creditors control [L] 4900 Creditor – Young 900 Creditor – Tuck 4000 Loan [L] 10000 Capital [OE] Converting to a double- entry accounting system (Memo 1) General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit Mar 17 Cash [A] 4000 Debtors control [A] 3000 Debtor – Crosby 1000 Debtor – Stills 2000 Stock [A] 18000 Shop fittings [A] 24000 GST [L] 1000 Creditors control [L] 4900 Creditor – Young 900 Creditor – Tuck 4000 Loan [L] 10000 Capital [OE] Converting to a double- entry accounting system (Memo 1) General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit Mar 17 Cash [A] 4000 Debtors control [A] 3000 Debtor – Crosby 1000 Debtor – Stills 2000 Stock [A] 18000 Shop fittings [A] 24000 GST [L] 1000 Creditors control [L] 4900 Creditor – Young 900 Creditor – Tuck 4000 Loan [L] 10000 Capital [OE] Converting to a double- entry accounting system (Memo 1) General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit Mar 17 Cash [A] 4000 Debtors control [A] 3000 Debtor – Crosby 1000 Debtor – Stills 2000 Stock [A] 18000 Shop fittings [A] 24000 GST [L] 1000 Creditors control [L] 4900 Creditor – Young 900 Creditor – Tuck 4000 Loan [L] 10000 Capital [OE] Converting to a double- entry accounting system (Memo 1) General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit Mar 17 Cash [A] 4000 Debtors control [A] 3000 Debtor – Crosby 1000 Debtor – Stills 2000 Stock [A] 18000 Shop fittings [A] 24000 GST [L] 1000 Creditors control [L] 4900 Creditor – Young 900 Creditor – Tuck 4000 Loan [L] 10000 Capital [OE] Converting to a double- entry accounting system (Memo 1) General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit Mar 17 Cash [A] 4000 Debtors control [A] 3000 Debtor – Crosby 1000 Debtor – Stills 2000 Stock [A] 18000 Shop fittings [A] 24000 GST [L] 1000 Creditors control [L] 4900 Creditor – Young 900 Creditor – Tuck 4000 Loan [L] 10000 Capital [OE] Converting to a double- entry accounting system (Memo 1) General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit Mar 17 Cash [A] 4000 Debtors control [A] 3000 Debtor – Crosby 1000 Debtor – Stills 2000 Stock [A] 18000 Shop fittings [A] 24000 GST [L] 1000 Creditors control [L] 4900 Creditor – Young 900 Creditor – Tuck 4000 Loan [L] 10000 Capital [OE] Converting to a double- entry accounting system (Memo 1) General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit Mar 17 Cash [A] 4000 Debtors control [A] 3000 Debtor – Crosby 1000 Debtor – Stills 2000 Stock [A] 18000 Shop fittings [A] 24000 GST [L] 1000 Creditors control [L] 4900 Creditor – Young 900 Creditor – Tuck 4000 Loan [L] 10000 Capital [OE] Converting to a double- entry accounting system (Memo 1) General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit Mar 17 Cash [A] 4000 Debtors control [A] 3000 Debtor – Crosby 1000 Debtor – Stills 2000 Stock [A] 18000 Shop fittings [A] 24000 GST [L] 1000 Creditors control [L] 4900 Creditor – Young 900 Creditor – Tuck 4000 Loan [L] 10000 Capital [OE] 33100 Converting to a double- entry accounting system (Memo 1) OE LA$33,100 $15,900$49,000= -- General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit Mar 17 Cash [A] 4000 Debtors control [A] 3000 Debtor – Crosby 1000 Debtor – Stills 2000 Stock [A] 18000 Shop fittings [A] 24000 GST [L] 1000 Creditors control [L] 4900 Creditor – Young 900 Creditor – Tuck 4000 Loan [L] 10000 Capital [OE] 33100 Converting to a double- entry accounting system (Memo 1) General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit Mar 17 Cash [A] 4000 Debtors control [A] 3000 Debtor – Crosby 1000 Debtor – Stills 2000 Stock [A] 18000 Shop fittings [A] 24000 GST [L] 1000 Creditors control [L] 4900 Creditor – Young 900 Creditor – Tuck 4000 Loan [L] 10000 Capital [OE] 33100 Converting to a double- entry accounting system (Memo 1) General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit Mar 17 Cash [A] 4000 Debtors control [A] 3000 Debtor – Crosby 1000 Debtor – Stills 2000 Stock [A] 18000 Shop fittings [A] 24000 GST [L] 1000 Creditors control [L] 4900 Creditor – Young 900 Creditor – Tuck 4000 Loan [L] 10000 Capital [OE] 33100 Converting to a double- entry accounting system (Memo 1) General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit Mar 17 Cash [A] 4000 Debtors control [A] 3000 Debtor – Crosby 1000 Debtor – Stills 2000 Stock [A] 18000 Shop fittings [A] 24000 GST [L] 1000 Creditors control [L] 4900 Creditor – Young 900 Creditor – Tuck 4000 Loan [L] 10000 Capital [OE] 33100 Converting to a double- entry accounting system (Memo 1) How was this figure calculated? 7.5 SITUATION #2 CONVERTING TO A DOUBLE-ENTRY SYSTEM
- 4. © Michael Allison. Author’s permission required for external use. TASK In-class Homework Ex7.4 X Ex7.5 X