Chapter 4
Introduction to
the Ledger Accounts
Recording Transactions
Via the Double Entry System
ALL transactions eventually make their
way into Ledger Accounts (also
referred to as "T" Accounts). A Ledger
Account looks like this
Recording Transactions
Via the Double Entry System
Date
DEBIT SIDE
Details
$
Date
CREDIT SIDE
Details
$
Recording Transactions
Via the Double Entry System
• The ledger account has two sides – a debit side
on the left and a credit side on the right. On
each side there are columns for the transaction
date, value, and details. It collects all the
transactions that are of a similar nature.
Recording Transactions
Via the Double Entry System
For example
The bank account will contain all transactions
that either caused the bank balance to be
increased or decreased.
The motor vehicle account will contain all
transactions that either caused the cost of all
vehicles to go up or to go down.
Recording Transactions
Via the Double Entry System
There are separate rules of double entry
for recording transactions related to:
Assets Capital
Expenses Liabilities
Revenue
Recording Transactions
Via the Double Entry System
To record
Account type
Increases
Decreases
GO TO THE SIDE INDICATED
ASSETS
DEBIT (DR)
CREDIT (CR)
LIABILITIES
CREDIT (CR)
DEBIT (DR)
CAPITAL
CREDIT (CR)
DEBIT (DR)
REVENUE
CREDIT (CR)
DEBIT (DR)
EXPENSES
DEBIT (DR)
CREDIT (CR)