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DOUBLE ENTRY PRINCIPLE
CHAPTER 4
A T-account
ACCOUNT
DEBIT CREDIT
ACCOUNT
The title of the account must be at the centre.
Two main columns/sides: Left side and right side.
Left side is known as debit side, right side is
known as credit side.
DEBIT CREDIT
DEBIT CREDIT
DEBIT CREDIT
ACCOUNT
DEBIT CREDIT
Note: when owner brings in any assets into his business it will increase his capital,
withdrawals will decrease the owner’s capital but is recorded in drawings account.
DOUBLE ENTRY PRINCIPLE FOR
EXPENSES AND REVENUES
ACCOUNT
DEBIT CREDIT
The double entry rules for expenses will be same as assets, whereas the double
entry rules for revenues is the same as liabilities and capital.
EXPENSES
ACCOUNT
DEBIT CREDIT
ACCOUNT
DEBIT CREDIT
DISCOUNT ALLOWED:
CARRIAGE OUTWARD:
The cost of transportation paid to deliver the goods sold
to the buyer’s premises.