Book-keeping

The D.E.S. for the

asset of stock

Chapter 4

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 2007 4-1

 6 rules for double entry book-keeping

Accounts To record Entry in the

account
Assets ↑an increase Debit
↓a decrease Credit
Liabilities ↑an increase Credit
↓a decrease Debit
Capital ↑an increase Credit
↓a decrease Debet

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 4-2

 6 rules for double entry book-keeping

Capital account Any asset account Any liability account

Decreases Increases Increases Decreases Decreases Increases

— + + — — +

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 4-3

 Purchase of stock on credit

Financial fact:
1 August 2006 Goods costing £160 are bought on
credit from D. Henry.

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 4-4

 Purchase of stock on cash

Financial fact:
2 August 2006 Goods costing £220 were bought,
cash being paid immediately.

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 4-5

 Sales of stock on credit

Financial fact:
3 August 2006, a business sold goods on credit for
£250 to K Leach.

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 4-6

 Sales of stock for cash

Financial fact:
4 August 2006, goods are sold for £55 cash being
paid immediately.

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 4-7

 Returns inwards

Financial fact:
5 August 2006, goods which had previously been sold
on credit to F Lowe for £29 have been returned by him.

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 4-8

 Returns outwards

Financial fact:
5 August 2006, goods previously bought for £96 are
returned by the firm to K Howe.

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 4-9

 End of Chapter 4:
The D.E.S. for
the asset of stock

Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 2007 4 - 10