>>>| Double Entry |<<<

[PRiYO]

Hi Every One .. I always ve trouble to undestand the double entry concept.. Is any one ve any idea how to remember what is what.any short cut . DR-CR

I will be delighted if any one response..

Thank You

[Acid]

Hi PriYO,

Thanks for this question..

The understand the logic and reason of Double entry priniciple is of outmost importance and is very easy indeed. You would need to apply these priniciples throughout your studies and as an accountant in the future.

For the better understanding of this I would suggest that you should buy F3 GTG Study text ( You can see my previous review on it in F3 Section ).

To understand book keeping priniciples you should follow one of this Thumb rule :


Debit (Dr)
Assets
Loss
Expenses


Credit (Cr)
Income
Liabilities
Profit


The above shows that which figure should always be on credit and which would be on Debit. If you can learn this and understand them than you can go on making the most complex account. Do not be confused by the name of any expense or asset , just try to understand the nature of the element i.e. is it an asset or an expense ? If an asset so it should always be on debit!

Cash is an asset so is on debit , an expense for example to buy an ipod is debited bcoz ultimately you pay to buy the enjoyment of listening to music! Loss is debited bcoz its just the outcome of management making loose policies and enjoying and not working properly and later on have to pay for this as an loss . i.e. mgmt. paid for the idle time spend in the office , for example.

So , basically once you are done with the understanding of this and then you are done with a big part of the syllabus and the problems ahead.

Also keep in mind , That Income statement is a part of Double entry while Balance sheet is not!

I would suggest you buy the GTG F3 Studytext for this.

I hope this is of help for you


Regards,
Acid

[Grace]

Hi Acid,

Thanks for your valuable comments.

Hi Priyo,

Doble-entry concept is really very important to know as an accountant.

It is very simple as stated by Acid.

For easy understanding you may please see our students bulletin for January 20X8.

GTG Study Text is really good to understand the concept easily.

[kamran_bsh]

Hello dear,
Following usually increase with a debit.Remember this acronym'DEAL
D-dividends & draws(drawings)
E-expenses
A-assets
L-losses
Following usually increase with a credit.Remember this acronym GIRLS
G-gains
I-incomes
R-revenues
L-liabilities
S-stockholder's(owners) Equity/Sales

Keep in mind that in double entry Each transaction has two aspects,one is debit and other is credit.This is not the case in single entry.I have told you rules to deal with these under normal circumstances.Basic rules are
Increase In assets & expenses will be debited while decrease will be credited.
Increase in incomes & liabilities will be credited & decrease will be debited

[Sonal]

Hello dear,
Following usually increase with a debit.Remember this acronym'DEAL
D-dividends & draws(drawings)
E-expenses
A-assets
L-losses
Following usually increase with a credit.Remember this acronym GIRLS
G-gains
I-incomes
R-revenues
L-liabilities
S-stockholder's(owners) Equity/Sales

Keep in mind that in double entry Each transaction has two aspects,one is debit and other is credit.This is not the case in single entry.I have told you rules to deal with these under normal circumstances.Basic rules are
Increase In assets & expenses will be debited while decrease will be credited.
Increase in incomes & liabilities will be credited & decrease will be debited

hi kamran,
it is really fantastic and simple to remember.
very very good

[kamran_bsh]

Yes my dear brother mehta its quite simple.I will love to solve problems of my friends on this forumn but obviously with in my capabilities:).If you have any area of difficulty you can ask me.
regards
kamran