How to make double entry easily

The double entry theory is divided into the two types of simple double entry and compound double entry;

 Simple restriction

It consists of a debtor party with one account and a credit party with one account, where the entry is, for 

example:

 Cars – 10000

To Cash – 10000  

 Compound enrollment 

It is the one whose two parties consist of a debtor and a creditor as well, but the two parties may have more than one account, and we say of those mentioned or those mentioned in, for example:

 Cars – 10000

 furniture – 10000

To  cash – 20000

Or

Cars – 10000

 furniture – 10000

To cash – 10000

To vendor _ 10000

To make any double entry easily, you should know the nature of the accounts, and in order to distinguish the debtor party from the creditor party, you should know that the receiving party is the debtor party and the giving party is the credit party.

Assets are of a debtor nature, that is, they come in the debtor party from the registry i.e. in the upper party, when the assets increase, they remain indebted and if they decrease, they become a creditor.

Expenses are debit by nature, and if they increase, they remain debit, and if they decrease, they become a creditor.

Opponents

Liabilities are by their nature a creditor because it is an obligation on the establishment towards others and it comes on the creditor party from the record, when the liabilities increase, it remains a credit and if it decreases, it becomes a debtor.

Ownership rights, by their nature, are creditable, therefore, because it is an obligation on the entity to the owners, and if it increases, it remains a debtor and if it decreases, it becomes indebted

Revenue is, by its nature, a credit. If it increases, it remains a credit and if it decreases, it becomes indebted

Example

Al-Amal Company was established on 01/01/2020

The business owner deposited the capital of 50,000, half in cash and the other half in the establishment’s account with the bank

The facility purchased a car with a value of 10,000 riyals in cash.

The facility purchased a photocopier half in cash and half on the account for the purpose of selling at a value of 20,000

On 3/3/2020, the facility paid the part owed from the photocopy machine to the creditors in cash

 Proof of accounting entries

 Bank A/c Dr – 25000

  Cash  A/c Dr – 25000

To capital A/c – 50000

We note that the cash account and the bank came to the debtor party because they are current assets and the asset is by its nature a debtor and the capital came in the creditor party because it is a right of ownership, any obligation on the facility towards the owners, and it is an obligation on the establishment according to the principle of the accounting unit as the facility has a legal personality separate from the personality of its owners Or its owner.

Second

 Cars A/c Dr – 10000

To cash A/c – 10000

We notice that the car account was indebted because it is a fixed asset, and the assets are in their nature a debt, and we note that the cash account came on the creditor side because it is less where the opposite of its debit nature came.

Third

Imaging A/c Dr – 10000

To cash A/c – 10000

To creditors A/c – 20000

We note that the photocopy machine came at the debtor party because it is a fixed asset and the cash came in the creditor party because it is a circulating asset whose value has decreased. We have paid 10,000 that went out from the sad one, meaning I said in exchange for the purchase of the imaging machine, and the creditors came as a creditor because it is a liability for any obligation on the facility where the imaging machine was purchased on me Account.

Fourthly

creditors A/c Dr – 10000

To cash A/c – 1000

We note here that the creditors ’account came opposite to its creditor nature on the debtor party because current liabilities and in case if the liabilities are reduced they become debit and cash came in contrast to its debit nature as it came as a creditor because it is a current asset and if the assets are reduced they become permanent.