The rules and principles of double entry - Double-entry accounting

Oct 24, 2026

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Double entry bookkeeping records each business transaction with a dual aspect: every transaction must be both debited and credited. The system uses ledger accounts presented as T-accounts, with separate pages or separate computer files per account. Debit side is the left-hand side and credit side the right-hand side, including clear account titles. Core account groups include assets, liabilities, capital, expenses, income, drawings, and loans, summarized by the DEAD CLIC acronym.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages2

Reading Time5 min

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What is Double Entry?

Basic rules of Double Entry

Necessary points when completing double entry

Account entry rules (Assets, Liabilities, Capital)

Example of double entry booking

The rules and principles of double entry What is Double Entry? The whole concept of double entry process is to record business transactions. Each transaction must have a dual aspect (meaning all transactions needs to be both debited and credited). We record transactions in a ledger account (also called a ‘T’ account) . Each account in the ledger will occupy a separate page; in a computerised system, the ledger will consist of a computer file, divided into separate accounts. The main accounts that are used are: bank, cash, capital, expenses, income, drawings and loans. A useful acronym to remember is DEAD CLIC. The acronym helps you remember what would be debited or credited in the ledger accounts. D Debit E Expenses A Assets D Drawings C Credit L Liabilities I Income C Capital The following points are necessary when completing double entry: • Records are kept on T-Accounts • Each account should be shown separately • The left hand side of the account is the Debit side • The right hand side of the account is the Credit side • The title of each account is written across the account at the centre Basic rules of Double Entry Usually a transaction would increase or decrease the Asset, Liability and Capital. | Accounts | To Record | Entry in the account | | --- | --- | --- | | Assets | 1. An increase
2. A decrease | 1. Debit
2. Credit | | Liabilities | 1. An increase
2. A decrease | 1. Credit
2. Debit | | Capital | 1. An increase
2. A decrease | 1. Credit
2. Debit | This is an example of double entry booking. Dr Bank Account Cr | Date | Detail | £ | Date | Detail | £ | | --- | --- | --- | --- | --- | --- | | 1 Feb | Capital | 3,000 | 3 Feb | Purchases | 100 | | 2 Feb | Sales | 250 | 5 Feb | Wages | 150 | | 7 Feb | Sales | 300 | 12 Feb | Purchases | 200 | | 15 Feb | J Walters loan | 1,000 | 20 Feb | Computer | 1,950 | | 25 Feb | Sales | 150 | 27 Feb | Wages | 125 | Dr Capital Account Cr | Date | Detail | £ | Date | Detail | £ | | --- | --- | --- | --- | --- | --- | | | | | 1 Feb | Bank | 3,000 | Dr Sales Account Cr | Date | Detail | £ | Date | Detail | £ | | --- | --- | --- | --- | --- | --- | | | | | 2 Feb | Bank | 250 | | | | | 7 Feb | Bank | 300 | | | | | 25 Feb | Bank | 150 | Dr Purchases Account Cr | Date | Detail | £ | Date | Detail | £ | | --- | --- | --- | --- | --- | --- | | 3 Feb | Bank | 100 | | | | | 12 Feb | Bank | 200 | | | | Dr Wages Account Cr | Date | Detail | £ | Date | Detail | £ | | --- | --- | --- | --- | --- | --- | | 5 Feb | Bank | 150 | | | | | 27 Feb | Bank | 125 | | | | Dr J Walters: Loan Account Cr | Date | Detail | £ | Date | Detail | £ | | --- | --- | --- | --- | --- | --- | | | | | 15 Feb | Bank | 1,000 | Dr Computer Account Cr | Date | Detail | £ | Date | Detail | £ | | --- | --- | --- | --- | --- | --- | | 20 Feb | Bank | 1,950 | | | |

FAQs

What does double entry mean in bookkeeping?

Double entry records business transactions so each one has a dual aspect, requiring both a debit and a credit.

How do you decide whether to debit or credit an account?

Assets are debited for increases and credited for decreases; liabilities are credited for increases and debited for decreases; capital uses credit for increases and debit for decreases.

How should T-accounts be completed in double entry?

Keep records on T-accounts, show each account separately, write the account title centered across the account, place debits on the left and credits on the right.

Oct 24, 2026

Upload by asba