Home For AAT student members AQ 2016 Foundation Certificate in accounting Bookkeeping Transactions
Current updates regarding coronavirus (Covid-19) and the precautions AAT are taking will be continually updated on the below page.

Please check this link for the latest updates:
We hope you are all safe and well and if you need us we will be here. 💚


Close to giving up

MarkAMarkA Registered Posts: 12
Hi, I wonder if I can get some advice.
I have self-funded the AAT Foundation LEvel by distance learning as I can not commit to specific lesson times due to my job. I don't want them to know I am looking for a for a career change either ( I'm in my early 50s)
I do P&L at work but mainly Excel and no accounts admin work or software. Basically, at my site, I receive the invoices to approve and post them to Head Office.
I started off well, but came unstuck on Double Entry Bookkeeping section. I've toiled for about 4 weeks, as I cannot give huge amounts of time due to the workload at work. Everything seems back to front by my logic, and now I have just moved to T accounts Ledger and those entries are opposite to my logic too.
Is it like this for everyone?
Do you have to go through this rite of passage and is the time taken to understand it normal? I am trying to lock it in so Ii get it and have no problems going forward, but find I am thinking what to my logic it is and then reversing it. Will automatically thinking it correctly ever happen? The end of the first folder seems eons away now, never mind the course, and I hope to complete the course by next April!
My tutor is very helpful, but is being positive and says everyone is different.
Thanks in advance.

Comments

  • David BallantyneDavid Ballantyne DurhamRegistered Posts: 112
    edited July 2018
    Hi Mark,

    Yes, unfortunately, this is a "rite of passage" that you have to go through. Double entry is the foundational concept upon which all financial accounting is based.

    I would suggest that most people, myself included, initially find the logic behind double entry bizarre and difficult to grasp. Even seasoned and experienced accountants sometimes need to stop and think about where to post transactions in the double entry system to the point of writing it out in T-accounts.

    Believe me, you are not alone!

    I eventually got my head around it by doing lots of practice questions.

    All the best.
    David Ballantyne
    Connect with me on LinkedIn!
    Ballantyne Accountants
    MarkA
  • MarkAMarkA Registered Posts: 12
    Thanks very much David. That is reassuring! I really appreciate you taking the time to reply.
  • CSan89CSan89 MAAT Posts: 207
    Which bits of double entry seem 'backwards' to you? Is it certain catagories (expenses or income for example) or just in general?
    AAT Level 2&3 - 2016
    AAT Level 4 - 2017
    Personal Tax, Business Tax and External Auditing

    ACA/CTA -
    Certificate Level - Jan 2019
    MarkA
  • MarkAMarkA Registered Posts: 12
    Hi C> @CSan89 said:
    > Which bits of double entry seem 'backwards' to you? Is it certain catagories (expenses or income for example) or just in general?

    I'm going to copy some later if that is OK.
    Thank you for replying.
  • crispycrispy Trusted Regular SouthamptonRegistered Posts: 456
    Hi Mark,

    I don't know if of any help but I also struggle with a crisis of confidence with my knowledge and ability - despite being fully AAT and CIMA qualified. I think with the double entry bookkeeping it's a case of practice and once it 'clicks' you will understand the logic and be able to apply it to different situations.

    Not an AAT book but I found Frank Wood's bookkeeping and accounts to be very helpful when completing the course, not sure what the latest version is but you should be able to find a copy on Amazon / Ebay.
    MarkA
  • David BallantyneDavid Ballantyne DurhamRegistered Posts: 112
    Hi Mark, Crispy,

    I too learned my double entry by working through Frank Wood's books! This was for an A-level in Accounting. When I later went on to do a degree, I found myself explaining the concept of double entry to the other undergraduates!

    I used Frank Wood's Business Accounting volumes 1 & 2.

    Mark, it may well be worth your time investing in these two books.
    David Ballantyne
    Connect with me on LinkedIn!
    Ballantyne Accountants
    MarkA
  • burgburg Experienced Mentor GloucesterModerator, FMAAT, AAT Licensed Accountant Posts: 1,441
    If you are down south then Whitehorse training in Bath do an awesome intro to accounting which covers double entry bookkeeping and the like.
    Would definitely recommend it.
    Regards,

    Burg
    MarkA
  • Hollycowley_28Hollycowley_28 Registered Posts: 29
    edited July 2018
    I was taught to remember double entry as "PEARLS".

    DR
    Purchases
    Expenses
    Assets

    CR
    Revenue
    Liability
    Source of funds

    (You use this method when the account is increasing, if the account is decreasing it is the opposite way round)

    For example; A firm pays it rent by cash... So double entry you would Debit the rent account which Is an expense as we are increasing that account, money is getting paid into it, Credit the cash account as you are decreasing the cash account as its reducing the amount of money in the account.

    Another example; A firm buys goods for resale, paying by cheque... So double entry you would Debit the Purchases account as you are increasing the purchases account, with every double entry you should always have one debit and one credit. So you now need to credit the bank account as again it is decreasing the amount of money held in the account.

    Just always remember every double- entry transaction needs to have one debit and one credit for it to balance, so once you know one account that you have to debit or credit you will know the other. Hope this has helped.


    MarkA
  • MarkAMarkA Registered Posts: 12
    crispy said:

    Hi Mark,

    I don't know if of any help but I also struggle with a crisis of confidence with my knowledge and ability - despite being fully AAT and CIMA qualified. I think with the double entry bookkeeping it's a case of practice and once it 'clicks' you will understand the logic and be able to apply it to different situations.

    Not an AAT book but I found Frank Wood's bookkeeping and accounts to be very helpful when completing the course, not sure what the latest version is but you should be able to find a copy on Amazon / Ebay.

    Thank you crispy, I will look into this Apologies for the delay in acknowledging you. Real life got in the way! It is really reassuring me. I am taking m time on this section so it "locks in" and saves rouble later! Your comments make me think that is right.
  • MarkAMarkA Registered Posts: 12
    CSan89 said:

    Which bits of double entry seem 'backwards' to you? Is it certain catagories (expenses or income for example) or just in general?

    Hi,
    CSan, It is genreally, bec
    MarkA said:

    Hi C> @CSan89 said:

    > Which bits of double entry seem 'backwards' to you? Is it certain catagories (expenses or income for example) or just in general?



    I'm going to copy some later if that is OK.

    Thank you for replying.

    Hi CSan,Iam sorry for the delay in responding, real lie getting int he way!
    I'm not sure I have done enough to be confident which I am struggling on. Though generally because I seem to have to really pause and think it through. Since you posted other responses indicating this is not uncommon, which is reassuring.
    For example :
    Business pays £900 cash to credit suppliers
    So my thinking was
    Cash Bank (Asset) Increases
    Payables (Liabilities) amount we owe increases
    Seeing the answer means I know It is a decrease. That makes sense when I can see the answer! But I can't get my brain to figure it out, I sort of freeze!
    I then put Cash DR 900, and Payables CR 900. figuring the liability lessened.
    Seeing the answer as Payables DR 900 but Cash CR on the Credit Side of double entry is logical only when I see it.
    I guess when it can be two increase or decrease effects but they convert into a debit and credit is the bit I am struggling to get my head round.
    Further example:
    (Example 7 Chapter 6. LEarning Phase)
    Business Makes cash sales of £400
    T Accounts Posting to LEdge accounts
    DR Cash CR
    # Narrative £ # Narrative £
    1 Cash 400

    DR Sales CR
    # Narrative £ # Narrative £
    1 Sales 400
    But I can see in the answer it is

    DR Cash CR
    # Narrative £ # Narrative £
    1 Sales 400

    DR Sales CR
    # Narrative £ # Narrative £
    1 Cash 400
  • MarkAMarkA Registered Posts: 12

    Hi Mark, Crispy,

    I too learned my double entry by working through Frank Wood's books! This was for an A-level in Accounting. When I later went on to do a degree, I found myself explaining the concept of double entry to the other undergraduates!

    I used Frank Wood's Business Accounting volumes 1 & 2.

    Mark, it may well be worth your time investing in these two books.

    Thank you, Davis (& crispy) this is brilliant. People with the same struggle and what helped them!
    Thanks very much for taking the time to help me.
  • MarkAMarkA Registered Posts: 12
    burg said:

    If you are down south then Whitehorse training in Bath do an awesome intro to accounting which covers double entry bookkeeping and the like.

    Would definitely recommend it.

    Thank you Burg, Bath is the opposite end of South for me, but a great suggestion and I will look for similar in my neck of the woods.
  • MarkAMarkA Registered Posts: 12

    I was taught to remember double entry as "PEARLS".

    DR
    Purchases
    Expenses
    Assets

    CR
    Revenue
    Liability
    Source of funds

    (You use this method when the account is increasing, if the account is decreasing it is the opposite way round)

    For example; A firm pays it rent by cash... So double entry you would Debit the rent account which Is an expense as we are increasing that account, money is getting paid into it, Credit the cash account as you are decreasing the cash account as its reducing the amount of money in the account.

    Another example; A firm buys goods for resale, paying by cheque... So double entry you would Debit the Purchases account as you are increasing the purchases account, with every double entry you should always have one debit and one credit. So you now need to credit the bank account as again it is decreasing the amount of money held in the account.

    Just always remember every double- entry transaction needs to have one debit and one credit for it to balance, so once you know one account that you have to debit or credit you will know the other. Hope this has helped.


    Thanks very much Holly. It has. And a helpful explanation.My tutor subsequently introduced PEARLS as her method. I think it's getting used to that now. It does intuitively feel more logical using more familiar terms
    Hollycowley_28
  • KTAAT82KTAAT82 Registered Posts: 7
    Kaplan used the acronym 'DEAD CLIC'

    DEBIT
    Expenses
    Assets
    Drawings

    CREDIT
    Liabilities
    Income
    Capital

    I found this very useful for myself :)
    MarkA
  • MarkAMarkA Registered Posts: 12
    KTAAT82 said:

    Kaplan used the acronym 'DEAD CLIC'

    DEBIT
    Expenses
    Assets
    Drawings

    CREDIT
    Liabilities
    Income
    Capital

    I found this very useful for myself :)

    Thank you.
    Thinking about it, it might be part before that. What are the dual effects, and making sure both of those are correctly worked out to ascertain which of the Dead Clic are the right ones.
    Also the fact there can be a debit and a credit under the Debit and Credit part of Dead Clic has confused me.
  • davidtrangmardavidtrangmar Registered Posts: 1
    Hello MarkA. I have only today stumbled across your cry for help of a while back, about Double Entry etc, and wondered if you ever found any peace with it. I hope you didn't give up. I am interested because I went through the same pain exactly.
    The concept is simple enough. Within a set of accounts if you move money from one, it must go to another, and vice versa, or the whole thing won't balance. My problem was what happened next - "so what?" so to speak. For me it became a question of what to do with the T accounts. I then discovered DEAD CLIC, which other respondents have addressed. This did not appeal to my logic AT ALL. I finally realised what I had to do, which was to run with it and not fight it. Its just a numerical convention. I just followed it, in the hope that I would understand later. That worked. I'm not 100% sure I fully understand even now, but I have found that I can live without that understanding. DEAD CLIC or PEARLS work a treat. Just go with it. Good luck, if belated. If anyone else is struggling with this, and it looks as though its not uncommon, well there's my advice.
  • MarkAMarkA Registered Posts: 12
    Just to follow up.
    I passed Bookkeeping Transactions today with 86%.
    Delighted, and it's spurred me on.
    It does seem to click, like everybody says.
    It was re doing the Rehearsal questions again a while later that helped me a lot.
  • MarkAMarkA Registered Posts: 12
    > @davidtrangmar said:
    > Hello MarkA. I have only today stumbled across your cry for help of a while back, about Double Entry etc, and wondered if you ever found any peace with it. I hope you didn't give up. I am interested because I went through the same pain exactly.
    > The concept is simple enough. Within a set of accounts if you move money from one, it must go to another, and vice versa, or the whole thing won't balance. My problem was what happened next - "so what?" so to speak. For me it became a question of what to do with the T accounts. I then discovered DEAD CLIC, which other respondents have addressed. This did not appeal to my logic AT ALL. I finally realised what I had to do, which was to run with it and not fight it. Its just a numerical convention. I just followed it, in the hope that I would understand later. That worked. I'm not 100% sure I fully understand even now, but I have found that I can live without that understanding. DEAD CLIC or PEARLS work a treat. Just go with it. Good luck, if belated. If anyone else is struggling with this, and it looks as though its not uncommon, well there's my advice.

    Sorry I did not get the notification for this, thank you for taking the time to support.
Sign In or Register to comment.