Basic Double Entry Book-Keeping

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:23AM in AAT student discussion
Happy new year everyone!

Sorry for the basic question, but am i on the right track here...

1. When a company invoices a client:
Income CR
Client DR

2. When invoice is paid:
Client CR
Cash DR

3. When refund/change is given to client
Expense DR
Client CR

and...

Client DR
Cash CR

4. When interest is received
Interest Receivable CR
Cash DR

Thanks,
Sue

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Basic Double Entry Book-Keeping

    yep your on the right track!

    Good luck
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Basic Double Entry Book-Keeping

    Can I just say for others reading the post that the double entry in no 1 is for a credit sale.

    A cash sale (defined as when payment is received at the same time goods are sold) is simply:

    DR Cash
    CR Income

    The double entry in no 3 is correct for a refund to a credit customer as by crediting the client account you are reducing their debtor, but I'm not sure what you mean by change? Do you mean change from a cash sale out of the till? As far as I am aware, this double entry would not exist as the change would simply be coming out of the cash in the till....

    Hope that helps a bit anyway!

    PP22

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