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Double Entry Bookkeping

LillyLilly New MemberRegistered Posts: 13
Hi everyone

I have just recently started my AAT foundation via distance learning and no matter how much I read I just cannot get double entry bookkeeping to sink in!!

Does anyone have any similar problems or tips to help me get it into my head!!

Thanks guys!!




  • K HK H Feels At Home Registered Posts: 81
    Think about this.

    A purchase of goods on credit.

    Credit Purchase Ledger Control (Creditors) £117.50
    Debit Vat Control £ 17.50
    Debit purchases £100.00

    Then when the Creditor is paid :
    Credit Bank (cheque drawn) £117.50
    Debit Purchase Ledger Control £117.50

    Come back to me if you don't understand as everything that leads on is merely an extension of the above.

    K H
  • speegsspeegs Experienced Mentor Registered Posts: 854
    Here are some ways to remember your debits and credits:

    Debits = DEAD
    Credit = CLIC

    This stands for:

    D = Debit
    E = Expenses
    A = Assets
    D = Drawings

    C = Credits
    L = Liabilities
    I = Income
    C = Capital

    also you could try


    DIALL = Debits increase assets and lessen liabilities

    CILLA = Credits increase liabilities and lessen assets

    I hope this helps. Shout if you need more help.

  • LillyLilly New Member Registered Posts: 13
    Hey thanks guys!!

    I`m going to read back through my books now with both those points in mind!!

    Hopefully the more I read it and do it, it will evenually go in!!


  • PGMPGM Font Of All Knowledge Registered Posts: 1,954
    The only advice I have is to keep going over the simple examples. Once you fully understand the basics the rest comes much more easily.
  • JohnJohn Feels At Home Registered Posts: 52
    Dead Clic

    Sorry to be thick but as a beginner could you please elaborate on this (simply) ?
  • gillwilsongillwilson Feels At Home Registered Posts: 41
    The only way to learn double entry is to remember the basics and practice practice practice.

    Basics being debits are ACED Credit are CLIP

    Asset Capital
    Cost Liabilities
    Expense Income
    Drawings Provisions

    The other thing that helped me is think about the bank first
    Debit side Credit side
    money in money out


    Also Dr Debtor Cr Creditors

    These are the basics that got me through intermediate, now through lots of practice it comes naturally.

    Hope this helps
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,071
    gillwilson wrote: »

    The other thing that helped me is think about the bank first
    Just what I was going to advise.
    "Money into the bank is a debit" goes against everything we as bank customers have been used to, but once you accept it, it becomes easier. Money into the bank (balance sheet) is a debit, thus your income (profit & loss account) is a credit. Money out of the bank is a credit, thus expenses are debits.

    Why is money into the bank a debit?

    Because having money in the bank is an asset. A creditor is a liability. When we have money in our bank account, the bank tells us we are in credit. That's because they owe us the money back, i.e. we are a creditor. If we are overdrawn they say our account is in debit - because we are now an asset - we owe them money. So we are used to thinking credit is good and debit is bad when it comes to banks. Once you realise the bank are telling you the position in their terms, not yours, it makes more sense.:001_smile:

    Also, if a transaction involves a Profit & Loss item, it's probably easiest to remember that credits are income and debits are expenses (just like you're used to with real life banking, just to confuse things!). Then you know that the other account has to be the opposite.

    Once it clicks, you'll have got it. Til it does, just persevere, and make some notes for yourself that explains it in the way that makes most sense for you - we all understand things in different ways, so find the explanation that is right for you and stick with it.

    Good luck, it boggled my brain for ages :lol::lol::lol:
  • LillyLilly New Member Registered Posts: 13

    That is an absolutley cracking explanation thank you very much!!

    I will be printing it off and I`ll have it with me when I read through my books tonight after work.

    I have my Mock Skills test next week on monday and then the proper one on Friday!!

    I`m going to need all the luck in the world!!!

    Thanks again

  • welshwizardwelshwizard Trusted Regular South WalesRegistered Posts: 465
    Just a word of advice:

    ALWAYS remember to complete one transaction (all its debits and credits) before you move on to the next one - you will find that if you keep maintaining double entry at this level things will be much easier.
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,071
    Aww thank you Lilly, so glad it helped! :laugh:
    And yes, as Welshwizard says, one step at a time.

    Good luck :)
  • Eagle Edu support tutorEagle Edu support tutor New Member Registered Posts: 13
    E Learning

    Don't forget the AAT have free e-learning tools which summarise the key learning points of double-entry bookkeeping. They are short and great, particularly if you are learning from home.

    Enjoy them.
  • Eagle Edu support tutorEagle Edu support tutor New Member Registered Posts: 13


    Sorry I meant to add the link!
  • PGMPGM Font Of All Knowledge Registered Posts: 1,954
    It makes total sense, and then I think about it....

    like how can putting money into the bank, and an expense both be a debit.

    But if you think of it, an expense means you have received something of value, like putting money into the bank. And the other entry to the expense being the credit, with either a liabilty to a creditor or credit to the bank.

    If that makes sense?
  • Eagle Edu support tutorEagle Edu support tutor New Member Registered Posts: 13
    Double Entry

    Double entry takes time to learn properly.

    It's all about in which financial statement the accounts show.

    So in the profit and loss account the accounts are:

    Sales/income (CR) - Expenses (DR)

    In the balance sheet it's

    Assets (DR) - Liabilities (CR)

    At the end of the year the bank account will show as either an asset account (because you have money in the bank that is owed to you by the bank) or a liability account (because you are overdrawn and you owe the bank money. So when you make a debit or credit entry into the bank account you are going to increase or decrease the bank account balance, therefore increase or decrease the business' liabilities or assets.

    If you are paying a telephone bill, then you are increasing the business' expenses, therefore debiting the expense account which shows in the profit and loss at the end of the year.

    It takes your time to get your head round it. But the great thing is once you do, it will stick forever!

    Have you had a go at the elearning?
  • LillyLilly New Member Registered Posts: 13
    Hey everyone

    I have just gone through the bookkeeping e-learning on the aat website and I wish I`d done it sooner!!

    The penny has finally dropped and it has now all clicked in to place!!

    To increase an account balance you apply the DEAD CLIC rules and to decrease the balance you do the opposite!

    You just need to break it all down and decide whether you`re increasing or decreasing the balances, then decide what the accounts are, ie liabilities, income, expense etc then apply the rules!

    I hope I have got that right!!

    Thanks to everyone for all your help!


  • A-VicA-Vic Expertise Guaranteed Registered Posts: 6,970
    Hey Lilly

    Arnt they really good :thumbup:.

    Am doing advanced certificate and wished id found them sooner, they made things a lot clearer and the attachment excersizes are brill. Covered all the unit five stuff on there just gonna back it up with the excersizes in the text books.

  • Eagle Edu support tutorEagle Edu support tutor New Member Registered Posts: 13
    You got it

    Hey Lily

    You got it! We are a distance learning company and we find they really help our home learners.

    Help AAT spread the word so more people get it sooner.

  • LillyLilly New Member Registered Posts: 13
    Wow I can`t believe after all that and with the help of everyone on here I managed to answer my own question!


    Thanks everyone!!

    Exam in the morning so fingers crossed!


  • A-VicA-Vic Expertise Guaranteed Registered Posts: 6,970

    Debits credits

    P E A R L S

    U X S E I A
    R P S V A L
    C E E E B E
    H N T N I S
    A C S U L
    S E e T
    e y

    Hope this worked and helps
  • A-VicA-Vic Expertise Guaranteed Registered Posts: 6,970
    opps didnt work sorry
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