WEEK/TERM: THIRD TERM/WEEK 1
CLASS: JSS 2
SUBJECT: Business studies
TOPIC: Double Entry Book-keeping
REFERENCE: Meybik New basic Business Studies
The double entry system of book keeping is based upon the principle that every transaction has two parts receiving and given aspect. This means every transaction invoices a debit entry in one account and a credit entry in another account. The rule to remember is debit the giver and credit the receiver.
Notes for the pupils:
MEANING OF DOUBLE ENTRY BOOKKEEPING
This is a system of accounting in which every transaction has a corresponding debit entry and credit entry. This means that every transaction must be recorded in two accounts; one account will be debited because it gives out values and the other will be credited because it has received in values. Double entry records are kept in a book called a ledger
RULES OF DOUBLE ENTRY
The following are treated in double entry account rules:
- Expenses are always debited.
- Revenues are always credited
- Debit the cash account when cash is given out.
- Credit the cash account when cash is received.
APPLICATION OF DOUBLE ENTRY
A single transaction will require two different entries in which the amount involved in a business transaction will be debited in one account and credited in the other. This, however, emphasizes the principle of double entry which states that for every debit entry, there must be a corresponding credit entry, and for every credit entry, there must be a corresponding debit entry. In double entry, the two major accounts involved are the journal and the ledger. The first entry of a transaction will be made in the journal while the second entry will be made in the ledger. For example, if there is a cash sale of goods for N100, the double entry principle requires that the cash book be debited with N100 and the sales account be credited with N100.
Cash book (Journal)
Sales account (Ledger)
- What is double entry bookkeeping?
- State the rules of double entry.
- Double entry records are kept in a book called…………
- State the principle of double entry.