double entry book keeping

dragonfly
dragonfly Registered Posts: 2 New contributor ?
is there some way of remmbering the art of double entry book keeping pls

Comments

  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    Money into the bank is a debit.

    Remember that, and everything else falls into place.
  • Gem7321
    Gem7321 MAAT, AAT Licensed Accountant Posts: 1,438
    PEARLS and DEADCLIC

    Purchases, Expenses, Assets = debit
    Revenue, liabilities, sales = credit

    DEBIT
    Expenses
    Assets
    Debtors/Drawings
    CREDIT
    Liabilities
    Income
    Creditors/Capital
    Hmc123
  • donnas1977
    donnas1977 Registered Posts: 182 ? ? ?
    DEAD CLIC was the one that worked for me.
  • bumblebee
    bumblebee Registered Posts: 135 ? ? ?
    Dr & Cr

    Debits - Assets & Losses (losses focusing on expenses)

    Credits- Liabilities & Profits (profits focusing on sales, income)
  • PGM
    PGM Registered Posts: 1,954
    Monsoon wrote: »
    Money into the bank is a debit.

    Remember that, and everything else falls into place.

    I agree! I prefer a simple method.

    I practiced with numerous T accounts, running through simple transactions. Once you do a few you'll get you're head around it. Then move on to sale of capital assets :D
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    PGM wrote: »
    I agree! I prefer a simple method.
    Thanks :)

    I never got on with Pearls or Dead Clic, but then that's just me.

    I should expand on my previous to say that money into the bank is a debit, and there will always be an equal credit for each debit.

    With that said.....

    If you remember money into the bank is a debit, and that having money in the bank is an asset, then you know that assets are debits. Therefore liabilities must be credits.

    If you know you received money from a sale, and it was banked, then you know that the sale must be a credit, as the money into the bank was a debit.

    If money into the bank is a debit, then money out must be a credit. Therefore if I paid out money to my phone bill, it must be credit bank and debit phone expense, therefore expenses are debits.

    I like the logical approach!
  • jilt
    jilt Registered Posts: 2,903
    Monsoon wrote: »
    I like the logical approach!

    Logic! Isn't that a bit like common sense these days, severley lacking!!
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    jilt wrote: »
    Logic! Isn't that a bit like common sense these days, severley lacking!!
    yeah but both work for me :D
  • Fireraiser
    Fireraiser Registered Posts: 91 ? ? ?
    jilt wrote: »
    Logic! Isn't that a bit like common sense these days, severley lacking!!

    They're not the same thing. Common sense it what tells us that the world is flat. Logic proves that it's round (well, OK an oblate spheroid) :)
  • A-Vic
    A-Vic Registered Posts: 6,970
    Fireraiser wrote: »
    They're not the same thing. Common sense it what tells us that the world is flat. Logic proves that it's round (well, OK an oblate spheroid) :)

    Nar common sence tells you the world must be round or you would fall off the edge where as logic backs that up - its all down to interpritation
  • PGM
    PGM Registered Posts: 1,954
    Monsoon wrote: »
    Thanks :)

    I never got on with Pearls or Dead Clic, but then that's just me.

    I should expand on my previous to say that money into the bank is a debit, and there will always be an equal credit for each debit.

    With that said.....

    If you remember money into the bank is a debit, and that having money in the bank is an asset, then you know that assets are debits. Therefore liabilities must be credits.

    If you know you received money from a sale, and it was banked, then you know that the sale must be a credit, as the money into the bank was a debit.

    If money into the bank is a debit, then money out must be a credit. Therefore if I paid out money to my phone bill, it must be credit bank and debit phone expense, therefore expenses are debits.

    I like the logical approach!

    Good explaination!

    Its a much better way of learning. You need to understand the accounts you're working on to know why things are going where they go, otherwise putting things into Dr or Cr based on memorising a list will only get you so far and likely to end up with mistakes with the more messy adjustents.
  • Rinske
    Rinske Registered Posts: 2,453
    Monsoon wrote: »
    Thanks :)

    I never got on with Pearls or Dead Clic, but then that's just me.

    I thought that was just me. I never got on with it either and used the same approach as you did, with the bank as starting point.
  • blobbyh
    blobbyh Registered Posts: 2,415
    Neither of you are alone, I never bothered with PEARLS or most other common acronyms as they often seemed more effort than learning the damned actual things in the first place. The only one I do remember using - and still do today - is ADS for asset disposals (Asset-Depreciation-Sale).

    Like Monsoon, I remember all my double entry theory from the bank T account. Once you know cash in is a debit and cash out is a credit, you can pretty much figure everything else out: even transactions that don't directly affect the bank account are often somehow linked to it, six degrees of separation and all that BS.
  • jilt
    jilt Registered Posts: 2,903
    The only thing I remember was assets are debited, laibilities are credited. Hadn't even heard pf PEARLS or DEAD CLIC till last year!
  • jewels.p
    jewels.p Registered Posts: 1,774
    PEARLS was my saviour at the beginning but more people seemed to use DEAD CLIC. Now I cant remember any of them!...........................only kidding. :laugh:
  • CJC
    CJC Registered Posts: 1,657
    I remember struggling with double entry for some time. Partly due to my own stupidity no doubt but don't think the way it was taught helped. Looking at receipts and payments separately with various complicating issues like settlement discounts and VAT it was hard to see the whole picture. It was only when we did trial balances that it all clicked.

    I think I used PERLS at the start and then either flows in (dr) and out (cr) of accounts or increase in assets / decrease in liabilities for debits and vice versa for credits (is that right it's been a while?). In the end though, much of the time, you end up just knowing where entries need to go.
  • blobbyh
    blobbyh Registered Posts: 2,415
    CJC wrote: »
    I think I used PERLS at the start

    ... there goes a man with no assets.

    I agree with you on that though Chris. (Bank) payments and receipts would have been better shown using both sides of a T account from the outset as in real life, rather than the full on Dickensian way we were taught in class.

    As for entering invoices into the accounts, daybooks, whatever - if they'd simply said "Debit the debtors" and "Credit the creditors" we'd have all saved so much time and stress!
  • Paisley
    Paisley Registered Posts: 93 ? ? ?
    PEARLS was the one for me.

    And for current assets on the balance sheet...

    Sit
    Down
    Pretty
    Black
    Cat

    Stock, Debtors, Prepayments, Bank, Cash
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    Paisley wrote: »
    And for current assets on the balance sheet...

    Sit
    Down
    Pretty
    Black
    Cat

    Stock, Debtors, Prepayments, Bank, Cash

    Actually, I used this one too. Simply to remember the different types of current assets that go in the top half of the BS, as I was getting used to the way accounts looked.
  • Paul C
    Paul C Registered Posts: 193 ? ? ?
    For me learning the bank entry dr and cr's was key, after that all other entries can be followed through with pen paper and a few T accounts.

    I seem to remember ( it was a while ago ) that it all seemed totally confusing & then suddenly it all clicked into place.
  • Primble
    Primble Registered Posts: 734
    Paisley wrote: »
    PEARLS was the one for me.

    And for current assets on the balance sheet...

    Sit
    Down
    Pretty
    Black
    Cat

    Stock, Debtors, Prepayments, Bank, Cash

    oooh i like this one
  • taskey
    taskey Registered Posts: 1,800
    blobbyh wrote: »
    .

    As for entering invoices into the accounts, daybooks, whatever - if they'd simply said "Debit the debtors" and "Credit the creditors" we'd have all saved so much time and stress!

    i agree on that bit

    as for he bank being the opposite way round, my saying is "in, out, shake it all about" which just tells me to do the opposite for the bank element

    tracy
  • jewels.p
    jewels.p Registered Posts: 1,774
    And for current assets on the balance sheet...

    Sit
    Down
    Pretty
    Black
    Cat

    Stock, Debtors, Prepayments, Bank, Cash[/QUOTE]

    Wish someone told me that one when I was learning.......................how'd I miss that I usually know all the acronyms!
  • jewels.p
    jewels.p Registered Posts: 1,774
    as for he bank being the opposite way round, my saying is "in, out, shake it all about" which just tells me to do the opposite for the bank element

    tracy[/QUOTE]


    Hence the picture on your profile Taskey?
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    jewels.p wrote: »
    Hence the picture on your profile Taskey?

    :D
  • taskey
    taskey Registered Posts: 1,800
    jewels.p wrote: »
    Hence the picture on your profile Taskey?

    absolutly, it is the dance i do when i am doing any payments from the bank lol
  • MarkAJ
    MarkAJ Registered Posts: 1 New contributor ?
    Pearls rule

    This is what I typed up the other day regarding pearls:

    to INCREASE to DECREASE

    Purchases Dr Cr
    Expenses Dr Cr
    Assets Dr Cr

    Revenue Cr Dr
    Liabilities Cr Dr
    Sales Cr Dr
    (or sometimes the "S" stands for Sources of funds, i.e. capital)

    This is how I remember it all anyway.
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