Cambridge(CIE) IGCSE Accounting - Double Entry Book-keeping with Ledger Accounts

Oct 29, 2026

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Cambridge(CIE) IGCSE Accounting material explains the double entry system and ledger account layout using the accounting equation Assets = Liabilities + Capital. It details how each transaction affects debit and credit sides, including Dr/Cr conventions, required entry information (date, details, value), and how to interpret account balances. The notes include advantages, definitions of debit and credit, guidance on which accounts to debit or credit for common sales, purchases, expenses, income, and drawings, and a step-by-step method to record transactions.

LanguageEnglish

CategoryExam

FormatPDF

Pages55

Reading Time2 h 19 min

AccessFree to download

The Double Entry System

Ledgers

Recording Transactions

Debits & Credits

Advantages and Account Rules

Entering Transactions (Steps)

Examples of Asset and Liability Changes

Cambridge(CIE)IGCSE Accounting Double Entry Book-keeping with Ledger Accounts Contents The Double Entry System Ledgers Recording Sale Transactions Recording Purchase Transactions Recording Other Transactions Balancing Accounts Transferring Balances to the Income Statement Interpreting Accounts & Their Balances Your notes The Double Entry System The double entry system What is the double entry system? The double entry system is used by book-keepers The double entry system is used to improve the accuracy of financial statements The double entry system is closely linked to the accounting equation Assets = Liabilities + Capital The equation is always balanced Each transaction causes both sides of the equation to: increase or decrease or remain the same Each transaction is entered into two accounts One is called adebit entry One is called a credit entry What is the layout of a ledger account? Each account will be split into two sides The debit entries appear on the left This side is sometimes labelled as Dr The credit entries appear on the right This side is sometimes labelled as Cr When you make an entry you need to include: The date of the transaction The details of the transaction This is normally the name of the other account involved The value of the transaction Your notes Example of a ledger account What are the advantages of maintaining double entry records? It is straightforward to prepare financial statements It can help give an accurate calculation of the profit or loss It reduces the possibility of fraud It gives easy access to information for the bank or other lenders Debits & credits Whatisa debit entry? A debit entry is used to: increase the value of an asset The left-hand side of the accounting equation increases decrease the value of a liability or the capital The right-hand side of the accounting equation decreases Whatisa credit entry? A credit entry is used to: increase the value of a liability or the capital The right-hand side of the accounting equation increases decrease the value of an asset The left-hand side of the accounting equation decreases Your notes Debit and credit entries achieve specific purposes depending on the typeof account Which accounts should Idebit? Debit an asset account when its value is increasing You receive cash Debit the cash account A customer buys goodson credit Debit their trade receivables account Debit a liability account when its value is decreasing You make a repayment on a bank loan Debit the bank loan account You pay an invoice to a credit supplier Debit their trade payables account Debit other accounts when the transaction decreases the capital You take assets from the business for personal use Debit the drawings account You pay an expense which decreases the profit Debit the relevant expense account Such as purchases, rent paid, discount allowed, etc Which accounts should I credit? Your notes Credit a liability account when its value is increasing You take out a bank loan Credit the bank loan account You buy goods on credit from a supplier Credit their trade payables account Credit an asset account when its value is decreasing You pay rent by bank transfer Credit the bank account A credit customer pays their invoice Credit their trade receivables account Credit other accounts when the transaction increases the capital You put more personal assets (such as money) into the business Credit the capital account You receive income which increases the profit Credit the relevant income account Such as sales, rent received, discount received, etc How doI enter the transactions into the accounts using the double-entry system? STEP 1 Identify the accounts involved in the transaction One is usually cash, bank, trade receivables

FAQs

What is the double entry system and why is it used?

The double entry system records transactions in two accounts to improve the accuracy of financial statements. It is closely linked to the accounting equation and keeps it balanced by recording both sides of each transaction.

How does a debit entry affect the accounting equation?

A debit entry increases the value of an asset and increases the left-hand side of the accounting equation. It also decreases the value of a liability or capital by decreasing the right-hand side.

How do you decide whether to debit or credit an account when recording a transaction?

Identify the accounts, determine whether each affects assets, liabilities, or capital, then decide if each account value is increasing or decreasing. Debit asset accounts when increasing, credit them when decreasing; debit liabilities or capital when decreasing, and credit them when increasing.

Oct 29, 2026

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