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Introduction to bookkeeping and accounting
Introduction to bookkeeping and accounting

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2 Double entry and the balance sheet

Section learning outcomes

By the end of this section you should be able to:

  • understand and explain the need for financial records and financial statements
  • understand the business entity and the dual aspect concepts
  • define assets, liabilities and capital
  • understand and explain the relationship between the accounting equation and double-entry bookkeeping
  • record transactions in the appropriate ledger accounts using the double-entry bookkeeping system
  • understand a simple balance sheet in a vertical format
  • balance off accounts at the end of an accounting period
  • prepare a trial balance.