4.3 What are the double-entry recording rules?

Question 1

How is every business transaction recorded in the ledger accounts?

Answer 1

By using the double-entry recording rules.

Question 2

What are the double-entry recording rules?

Answer 2

1. Each business transaction will have at least one debit entry to one account and at least one credit entry to another account.
2. The total debit value must always equal the total credit value for each transaction.

Question 3

What is the double entry rule of recording for an asset account?

Answer 3

Debit - increase in an asset is debited

Credit - decrease in an asset is credited

Question 4

What is the double entry rule of recording for a liability account?

Answer 4

Debit - decrease in a liability is debited

Credit - increase in a liability is credited

Question 5

What is the double entry rule of recording like for ‘equity’?

Answer 5

Debit - decrease in an equity is debited

Credit - increase in an equity is credited

Question 6

What is the double entry rule of recording for the accounting element “income”?

Answer 6

Debit - decrease in an income is debited

Credit - increase in an income is credited

Question 7

What is the double entry rule of recording for the accounting element ‘‘expense”?

Answer 7

Debit - increase in an expense is debited

Credit - decrease in an expense is credited