1. Introduction to Double Entry
Ms Marshall 5th Year Accounting

2. List what you need if you are to set up a Business
Ms Marshall 5th Year Accounting

3. Introduction to double entry
For every debit entry there is a corresponding credit entry in every transaction.
There are four main rules at the centre of double entry and these rules depend on you knowing: assets, liabilities, expenses and revenues (gains).
Asset:
Asset: something of value that you own. Current assets are short term and include bank, debtors (money owed to you) closing stock, cash, gains receivable due, expenses prepaid. Fixed assets last a long time. Typical examples include buildings, land, vehicles…
Ms Marshall 5th Year Accounting

4. Liability: Expenses: Revenues:
Liability: something a company owes. Current – short term, less than one yr e.g. bank o/d, creditors. Long term – Loans. Capital.
Expenses: the day to day costs of running the business e.g.?
Revenues: income, the reason the company exists!
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5. The Rules
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6. The rules
Ms Marshall 5th Year Accounting

7. Double entry exercise
For each of the following transactions, identify:
1) The Accounts
2) Whether they are an asset, liability, expense or revenue.
3) Whether they have increased or decreased.
4) Your debit and your credit.
Ms Marshall 5th Year Accounting

8. Purchased goods for resale with a cheque, €1,000.
Joe’s Car sales ltd
Purchased goods for resale with a cheque, €1,000.
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9. Purchased car on credit €5,000
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10. Paid Light & Heat by direct debit €300
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11. Sold car for €7,000 cash (lodged).
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12. Bought computer €1,200, paid by cheque.
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13. Received loan €20,000
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14. Sold stock on credit, €400.
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15. Wrote off a bad debt of €200
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16. Received interest on savings €42.
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17. 31/12/12: Depreciation charge for Buildings for the year is €4,000
31/12/12: Depreciation charge for Buildings for the year is €4,000. Complete the depreciation and provision for depreciation accounts.
Depreciation
Provision for Depreciation
1/1/12 Balance b/d 25,000
Ms Marshall 5th Year Accounting