The Concept of Double Entry

Owner contribute personal computer into the business.

• Dr Cash at Bank Cr Capital

• Dr Fixtures&Fittings Cr Capital

• Dr Capital Cr Cash at Bank

• Dr Capital Cr Fixtures&Fittings

Owner withdrew cash from the business bank account for his personal use.

• Dr Cash in Hand Cr Cash at Bank

• Dr Capital Cr Cash at Bank

• Dr Drawings Cr Cash at Bank

• Dr Drawings Cr Cash in Hand

Purchased goods and paid cash.

• Dr Inventory Cr Cash in Hand

• Dr Cash in Hand Cr Inventory

• Dr Inventory Cr Cash at Bank

• Dr Cash at Bank Cr Inventory

Sold goods to Amy, on credit.

• Dr Trade Receivable: Amy Cr Inventory

• Dr Sales Revenue Cr Inventory

• Dr Cash at Bank Cr Sales Revenue

• Dr Trade Receivable: Amy Cr Sales Revenue

Cost price of goods sold is $1000.

• Dr Cost of Sales Cr Inventory

• Dr Inventory Cr Cost of Sales

• Dr Sales Revenue Cr Inventory

• Dr Cost of Sales Cr Sales Revenue

Paid for rent by cash.

• Dr Cash in Hand Cr Rent Income

• Dr Rent Expense Cr Cash at Bank

• Dr Rent Expense Cr Cash in Hand

• Dr Cash at Bank Cr Rent Income

Owner deposited his personal cash into the business bank account.

• Dr Cash in Hand Cr Cash at Bank

• Dr Cash at Bank Cr Cash in Hand

• Dr Cash at Bank Cr Capital

• Dr Capital Cr Cash at Bank

Received cash for commission earned.

• Dr Cash at Bank Cr Commission Income

• Dr Commission Expense Cr Cash in Hand

• Dr Commission Expense Cr Cash in Hand

• Dr Cash in Hand Cr Commission Income

Received a cheque from credit customer Jane.

• Dr Cash at Bank Cr Trade Receivable: Jane

• Dr Trade Receivable: Jane Cr Cash at Bank

• Dr Cash at Bank Cr Trade Payable: Jane

• Dr Cash at Bank Cr Sales Revenue

Took a bank loan to purchase motor vehicle.

• Dr Inventory Cr Bank Loan

• Dr Cash at Bank Cr Bank Loan

• Dr Motor Vehicle Cr Bank Loan

• Dr Bank Loan Cr Motor Vehicle