Close to giving up

MarkA

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.

David Ballantyne

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.

MarkA

Thanks very much David. That is reassuring! I really appreciate you taking the time to reply.

CSan89

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

MarkA

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.

crispy

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.

David Ballantyne

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.

burg

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.

Hollycowley_28

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

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.

MarkA

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

MarkA

David Ballantyne said:

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.

MarkA

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.

MarkA

Hollycowley_28 said:

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

KTAAT82

Kaplan used the acronym 'DEAD CLIC'

DEBIT
Expenses
Assets
Drawings

CREDIT
Liabilities
Income
Capital

I found this very useful for myself

MarkA

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.

davidtrangmar

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.

MarkA

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.

MarkA

> @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.