Double entry bookkeeping
Double-entry bookkeeping records each transaction with equal total debits and credits. This preserves the accounting equation and shows the transaction’s dual effect. One entry may involve several accounts, but total amounts on both sides must agree. Debits and credits follow the nature of each account; they do not always mean cash received and cash paid.
Worked example
Goods bought on credit for $800 debit purchases or inventory $800 and credit trade payables $800; no cash moves yet.
Common mistake
Equal debits and credits do not prove the entry is correct: using the wrong account or omitting a complete transaction can leave the books balanced.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Direct | July 2027–August 2028 |
| ACCA | F2 | Direct | July 2027–August 2028 |
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | K1 | Direct | July 2027–August 2028 |
| CIMA | BA3 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |