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3 Doble entry PowerPoint Presentation
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3 Doble entry

3 Doble entry

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3 Doble entry

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  1. Double Entry System 3 DR CR

  2. Objectives • At the end of the lesson, students should be able to : • know what are Purchases, Sales, Returns • Inwards and Returns Outwards. • know what are Expense and Revenue items. • know how to record them into Journals and • post to the Ledger Accounts.

  3. Expenses and Revenues

  4. Purchases: Purchase of goods for resale purpose. (Cost price)  expense for the firm Sales: Sale of goods to customers. (Selling price)  revenue for firm

  5. Expenses: Money that the firm spent in the process of operating the business to earn revenue. Examples: Rent Insurance Wages Advertising Transport Revenues: Items that generate profits and income for the firm. Examples: Rent Revenue Interest Revenue Commission

  6. CREDIT DEBIT DEBIT CREDIT EXPENSES REVENUES

  7. SO HOW DO YOU RECORD EXPENSES AND REVENUES?

  8. a) John purchased goods at $6000 on credit from ABC Ltd on 26 November 2000. Double Entry Date Particulars Debit Credit $ $ 2000 Nov 26 6000 Purchases 6000 Creditors-ABC Purchases worth $6000 from ABC Ltd.

  9. b) John sold goods at $9000 on credit to PCK Ltd on 8 July 2000. Double Entry Date Particulars Debit Credit $ $ 2000 July 8 9000 Debtors-PCK 9000 Sales Sales worth $9000 to PCK Ltd.

  10. c) The firm incurred the following expenses: 19 March - Rent $2000 8 May - Wages $10,000 Date Particulars Debit Credit $ $ Double Entry 2000 Mar 19 2000 Rent expense 2000 Cash Record rent expense of $2,000. 10,000 May 8 Wage expense 10,000 Cash Record wages of $10,000.

  11. d) The firm received the following revenues: 27 March - Rent $3000 19 June - Interest $500 Date Particulars Debit Credit $ $ Double Entry 2000 Mar 27 3000 Cash 3000 Rent revenue Record rent revenue of $3,000. 500 June 19 Cash 500 Interest revenue Record interest revenue of $500.

  12. e) The firm returned some damaged goods to supplier (ABC) worth $2000 on 10 July. Date Particulars Debit Credit $ $ Double Entry 2000 July 10 2000 Creditors-ABC 2000 Returns Outwards Record returns outwards of $2,000.

  13. f) A customer, XYZ returned some damaged goods to the firm worth $1500 on 8 August. Date Particulars Debit Credit $ $ Double Entry 2000 Aug 8 1500 Returns Inwards 1500 Debtors-XYZ Record returns inwards of $1,500.

  14. It is common for the owner to draw money or goods from the firm for personal use anytime. According to the Accounting Entity concept, we must record the event even though he is the owner of the firm. What do you call this? Click me!

  15. It is common for the owner to draw money or goods from the firm for personal use anytime. According to the Accounting Entity concept, we must record the event even though he is the owner of the firm. DRAWINGS What about drawings of goods?

  16. The owner withdrew goods worth $2000 for • his personal use on 10 April 2000. General Journal Date Particulars Debit Credit $ $ 2000 April 10 2000 Drawings 2000 Purchases To record drawings of goods worth $2000.