Lecture 2:
Recording Accounting
Transactions – Debit & Credit
Wait!! Let’s do a little recap!
The double entry system
 Every transaction affects two items.
 These effects need to be shown in the accounting
books.
 This is double entry bookkeeping.
A double entry account
How recording in an account
affects items
Or, to see this in the accounts
Activity
The owner starts the business with £10,000 in cash on
1 August 2012.
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A van is bought for £4,500 in cash on 2 August 2012.
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Fixtures (e.g. shelves) are bought on credit from
Shop Fitters for £1,250 on 3 August 2008.
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Paid the amount owning to Shop Fitters in cash on
17 August 2012.
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Combining all four of these transactions, the
accounts now contain:
Activity
Activity (Continued)
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Main reference text:
Alan Sangster & Lewis Gordon. (2021).
Frank Wood's Business Accounting (15th
edition). Pearson.