Double Entry Records & Trial Balance
A double entry record is a system which records financial transactions between two ledger accounts.
Ledger
The info in the day books is posted to the ledgers. Ledgers are books in which all individual accounts are recorded.An account is used to bring together all the transactions involving a particular person or company; income or expense; or a particular object.
Accounts can be classified as follows.
1.Personal Account – Transaction with a person or company
2.Real Account- Transactions with objects (eg. Computers/ buildings)
3.Nominal Accounts- Temporary account that records a business' expenses & gains.
Basic Bookkeeping Rules
1.Personal Accounts
·Debit the receiver of goods/money
·Credit the giver of goods/money
2.Real Accounts
·Debit objects received
·Credit objects given
3.Nominal Accounts
·Debit expenses
·Credit gains
4.Asset and Liability Accounts
·Debit assets
·Credit Liabilities
The Trial Balance
The trial balance is used to make sure that the debit balances are equal to the credit balances of all accounts. The trial balances lists all ledger accounts, and has a separate column for debit & credit balances. Here's an example:
Q &A
1. What is a personal account?
a.) A private description of an event/experience
b.) An account that records transactions with a person/company
c.) A type of cheese
2. In a real account, what do you debit, and what do you credit?
a.) Debit objects given, credit objects received
b.) Credit objects given, debit objects received
c.) Debit expenses, credit gains
3. What is a nominal account?
a.) Temporary account that records a business's expenses & gains
b.) An account that exists in name only
c.) An account that records assets & liabilities
4. What is a double entry record system?
a.) A burglar alarm that records 2 entry points
b.) A computer that records a ledgers profit & loss
c.) A system that records transactions between at least 2 ledger accounts
5. What is a ledger?
a.) A book of financial accounts of the same type
b.) An adrenaline junkie that climbs ledges
c.) An account that records credit & debit
6. What's a trial balance?
a.) It's used to make sure that the credit is equal to the debit balance
b.) It's used to balance cashflow in a ledger
c.) A type of account
7. What do you debit & credit in an asset & liability account?
a.) Debit asset & credit liability
b.) Debit liability & credit asset
c.) Credit both then subtract debit from liability
8. What is debit?
a.) Money that comes in
b.) Money that goes out
c.) Another word for Anencephalous
9. What is credit?
a.) Money that comes in
b.) Stolen money
c.) money that goes out
10. Which columns does debit & credit go into on a trial balance
a.) Debit on the left, credit on the right
b.) Credit on the right, debit on the left
c.) Debit first, credit below it
1. What is a personal account?
a.) A private description of an event/experience
b.) An account that records transactions with a person/company
c.) A type of cheese
2. In a real account, what do you debit, and what do you credit?
a.) Debit objects given, credit objects received
b.) Credit objects given, debit objects received
c.) Debit expenses, credit gains
3. What is a nominal account?
a.) Temporary account that records a business's expenses & gains
b.) An account that exists in name only
c.) An account that records assets & liabilities
4. What is a double entry record system?
a.) A burglar alarm that records 2 entry points
b.) A computer that records a ledgers profit & loss
c.) A system that records transactions between at least 2 ledger accounts
5. What is a ledger?
a.) A book of financial accounts of the same type
b.) An adrenaline junkie that climbs ledges
c.) An account that records credit & debit
6. What's a trial balance?
a.) It's used to make sure that the credit is equal to the debit balance
b.) It's used to balance cashflow in a ledger
c.) A type of account
7. What do you debit & credit in an asset & liability account?
a.) Debit asset & credit liability
b.) Debit liability & credit asset
c.) Credit both then subtract debit from liability
8. What is debit?
a.) Money that comes in
b.) Money that goes out
c.) Another word for Anencephalous
9. What is credit?
a.) Money that comes in
b.) Stolen money
c.) money that goes out
10. Which columns does debit & credit go into on a trial balance
a.) Debit on the left, credit on the right
b.) Credit on the right, debit on the left
c.) Debit first, credit below it