Scribd
Upload
28 views

Accounting Chapter 4

ACCOUNTING TEKS CHAPTER 4

Uploaded by

MUHAMMAD ZULHAIRI BIN ROSLI STUDENT
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
28 views

Accounting Chapter 4

ACCOUNTING TEKS CHAPTER 4

Uploaded by

MUHAMMAD ZULHAIRI BIN ROSLI STUDENT
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 21

FINANCIAL ACCOUNTING FOR

NON-ACCOUNTING
STUDENTS
6TH Edition

Copyright © 2020 by McGraw-Hill Education (Malaysia) Sdn Bhd All rights reserved.
1
CHAPTER 4:
DOUBLE ENTRY PRINCIPLE
HIGHLIGHTS OF THE CHAPTER

• Double entry rules for:


• Assets
• Capital
• Liabilities
• Income
• Expenses
• Inventory
• Trade discount vs cash discount
• Carriage inwards vs carriage outwards
A T-account

CASH ACCOUNT

DEBIT CREDIT

4
ACCOUNT

■ The title of the account must be at the centre.


■ Two main columns/sides: Left side and right side.
■ Left side is known as debit side, right side is known as credit side.

The account will show either an increase or decrease in:

Specific Ownerʼs
asset equity Expenses
Liability Income

5
DOUBLE ENTRY PRINCIPLE FOR ASSETS, LIABILITIES AND
CAPITAL

ACCOUNT

DEBIT CREDIT
To record INCREASE in assets To record DECREASE in assets
To record DECREASE in liabilities To record INCREASE in liabilities
To record DECREASE in capital To record INCREASE in capital

6
ASSETS

ACCOUNT

DEBIT CREDIT

To record INCREASE in assets To record DECREASE in assets

7
LIABILITIES

ACCOUNT

DEBIT CREDIT
To record DECREASE in
To record INCREASE in liabilities
liabilities

8
DOUBLE ENTRY PRINCIPLE FOR ASSETS, LIABILITIES AND
CAPITAL

ACCOUNT

DEBIT CREDIT

To record DECREASE in capital To record INCREASE in capital

Note: when owner brings in any assets into his business it will increase his capital,
withdrawals will decrease the ownerʼs capital but is recorded in drawings account.

9
DOUBLE ENTRY PRINCIPLE FOR EXPENSES AND INCOME

ACCOUNT

DEBIT CREDIT
To record INCREASE in expenses To record DECREASE in expenses
To record DECREASE in income To record INCREASE in income

The double entry rules for expenses will be same as assets, whereas the double entry
rules for income is the same as liabilities and capital.

10
EXPENSES

ACCOUNT

DEBIT CREDIT
To record DECREASE in
To record INCREASE in expenses
expenses

11
INCOME

ACCOUNT

DEBIT CREDIT

To record DECREASE in income To record INCREASE in income

12
DOUBLE ENTRY PRINCIPLE FOR INVENTORY

TRANSACTION EFFECTS ACCOUNT INVOLVED

Purchases expense Debit purchases


Purchases of goods
increase account
Sales revenue
Sales of goods Credit sales account
increase
Credit purchases
Purchases expense
Purchases return return or Return
decrease
outward account
Debit sales return or
Sales revenue
Sales return Return inward
decrease
account

13
TRADE DISCOUNT

■ An allowance given by the seller to the buyer to encourage the


buyer to buy in bulk (large quantity)

■ Will be deducted direct from the total selling price

■ Will not be recorded in the books of accounts

14
CASH DISCOUNT

■ An allowance given by the seller to the buyer to encourage the


buyer to make prompt payment

■ 2 types of each cash discount:

Discount To the By the Discount


allowed buyer seller received

■ Discount received is treated as income to the business.


■ Discount allowed is an expense to the business.
■ Both will be recorded in the statement
15 of profit or loss
JOURNAL ENTRY

■ Discount received – received by suppliers


○ Dr Payables account (Creditors/Purchases)
Cr Discount received account

■ Discount allowed – giving to our customers


○ Dr Discount allowed account
Cr Receivables account (Debtors/Sales)

16
JOURNAL ENTRY

■ Discount received
○ Dr Payables account
Cr Discount received account

■ Discount allowed
○ Dr Discount allowed account
Cr Receivables account

17
CARRIAGE

CARRIAGE INWARD dari CARRIAGE OUTWARD


supplier dihantar ke customers
■ The cost of transportation paid ■ The cost of transportation paid
to bring the goods bought to to deliver the goods sold to the
the business premises. buyerʼs premises.
■ It is part of cost of goods sold ■ It is part of expenses

Dr Carriage inward account @ Carriage outward account


Cr Cash @ Bank account

18
Thanks!
Any questions?

19
QUIZ 2

20
State how the double entry for the following transactions:

Ogos 1 Started business by putting RM15,000 of his own


money into a business bank account.
2 Bought office furniture by internet transfer from bank
account RM2,800.
3 Bought computer equipment RM1,260 on time from
TVC Ltd.
5 Bought a car paying by cheque RM4,950
8 Sold some of the office furniture – original cost
RM750 on time to Jevons & Co.
15 Paid the amount owing to TVC Ltd RM1,260 by
internet transfer from bank account.
23 Received the amount due from Jevons & Co RM750
by cheque.
31 Bought machinery using the business’s debit card
21 RM710

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy