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.