Double Entry Examples in Bookkeeping

Accounting is a blend of theory and practice. One of the key elements to understanding the practice of accounting is double entry bookkeeping. to do it, you should be in real accounts department in companies but usually, no company hire accountant without any experiment, so it is recommended to seek for a trainee position in large company to start your real practices.

This section illustrates with two practical examples the principles already explained. The first is extremely straightforward. In the section about single entry bookkeeping the point was made that a birdwatchers’ club might not
see the need for double entry records, but let us suppose that a new treasurer has instituted a double entry system and that the following four events occur on the first day:

  1. A member pays her annual subscription of £50
  2. The club buys a new telescope for £400
  3. The treasurer is reimbursed £100 for stamps that he has bought
  4. The annual subscription of £75 is paid to The Federation of British Birdwatchers.

Journal Entry of Bank Account

Double entry of Bank account turn overs in bookkeeping

You will no doubt have noticed that the debits have received the benefits and that the credits have given the benefits, and also that the total of the debits equals the total of the credits. You may also have noticed that more has gone out of the bank than has been received. Let us hope that the birdwatchers have an agreed overdraft facility or started the period with money in the bank.

The second example relates to a business and involves purchases and sales made on credit. The accounts reflect the posting for the following transactions.

  1. A sale of £110 is made for cash which is banked
  2. A sale of £4,000 is made on credit to J. K. Patel Ltd
  3. A sale of £60 is made on credit to Cohen and Levin Ltd
  4. Payment of £3,200 (relating to a previous sale) is received from J. K. Patel Ltd
  5. Widgets for resale costing £2,700 are purchased on credit from Widget Supplies Ltd
  6. Wages of £6,000 are paid
  7. An invoice for £2,000 relating to advertising is received from King Brothers


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