Prework Double Entry Flashcards
When considering what type of account the transaction will impact what are the 6 types of account that need to be considered?
- expenses
- assets
- drawings
- laibilies
- income
- capital
what does it mean when we debit the account?
increasing expenses, assets and drawings
what does it mean when we credit the account?
- increase liabilities, income and capital
What is an acronym to remember this?
DEAD CLIC
D= debit
E= expense
A= assets
D= drawings
C= credit
L= liabilities
I= income
C= capital
what is a decrease in liabilities, income and capital known as?
known as a debit
What is a decrease in expenditure, assets, drawings known as?
known as a credit
what are the 4 steps to recording a transaction?
- identify the two accounts that are affected
- are they being increased or decreased?
- should the account be debited or credited
- check that a debit entry and a credit entry for equal amounts have been made
what are the rules for debit and credit?
you must always have an equal and opposite debit and credit
what would be the debit and credit for:
Sold vegetables for £2,500
Dr Cash £2,500
Cr Sales £2,500
what would be the debit and credit for:
Brought 6,000 worth of fruit from wholesalers on credit?
Dr purchases 6,000
Cr payables 6,000
what would be the debit and credit for:
brought 3000 for cash
Dr purchases 3000
Cr Cash 3000
what would be the debit and credit for:
sold all the fruit bought in (2) above for 7,5000 on credit to Rory Glossop
Dr receivables 7,500
Cr sales 7,500
what would be the debit and credit for:
Paid Wholesalers 3500
Dr payables 3500
Cr Cash 3500
what would be the debit and credit for:
Rory Glossop paid for his fruit in full
Dr Cash 7500
Cr Receivable 7500
what would be the debit and credit for:
paid a 200 telephone bill
Dr phone bill 200
Cr cash 200
