1. Double entry bookkeeping
Part Three
Double entry bookkeeping

2. Double entry bookkeeping
The basic principle of double entry bookkeeping is that every transaction has a twofold effect. In other words, a value is received and a value is yielded or parted with. Both effects, which are equal in amount, must be entered completely in the bookkeeping records.　

3. In double-entry bookkeeping, a book in which both the debit side and the credit side of the transaction are entered is called a journal, while another book used to list all the accounts of an organization is called a ledger. Entries from the journal are transferred to the ledger at regular intervals, usually monthly. This process is called posting.　

4. Double Entry System Record dual effects of each transaction
Each transaction affects at least two accounts
Each transaction is recorded with at least
One debit
One credit
Total debits must equal total credits

5. T-Account
Simple tool for analyzing and determining the balance in a given account
Account Name
(Left Side) Debit
(Right Side) Credit
In every account - dr and cr have opposite effects.
In an account where a dr is an increase, a credit is a decrease.
When you analyze transactions, think in terms of dr and cr instead of increase and decrease.

6. Rules of Debit and Credit
Assets
Increase Decrease Debit Credit
Normal Balance
Liabilities
Decrease Increase Debit Credit
What transactions increase owner’s equity? Revenues and Investments by owner – “Click”
This is why we increase revenues and capital with credits
What transactions decrease owner’s equity? Expenses and owner withdrawals - “Click”
This is why we recognize expenses and withdrawals with debits
Normal Balance

7. Rules of Debit and Credit
Owner’s Capital
Decrease Increase Debit Credit
Normal Balance

8. Rules of Debit and Credit
Owner’s Drawing
Decrease Increase Debit Credit
Normal Balance

9. Rules of Debit and Credit
Revenues
Decrease Increase Debit Credit
Normal Balance
Expenses
Increase Decrease Debit Credit
Normal Balance

10. Debit-credit bookkeeping
Set Account:
The account can be divided into assets (including cost) account and liabilities, and owner's equity (including income) account.
Increases in assets are recorded in the left side of the account and decreases in assets are recorded in the right side , and conversely , increase in liabilities and owner’s equity are recorded by credits and decreases in liabilities and owner’s equity are recorded by debits. There are the rules of debit and credit.

11. In the sum of an account’s has a debits is greater than the sum of its credits ,that account has a debit balance , as the cash account does here and if the sum of its credits is greater ,that account has credit balance , as accounts payable does .

12. The rules of recording:
It can be conclude :
If there debit , there must be a credit ,the amount of the credit and debit will be equal .
First, any economic business can be recorded in two or more than two respectively account;

13. Second , the account can be the same kind , they can also be not be the same kind , if one were recorded to the debit , the other must be recorded to the credit .both neither can be all direction.
Third, the amount recorded in the debited and credit must be equal.