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Led by Fra Luca de Pacioli Simulacrum
Led by Fra Luca de Pacioli Simulacrum
The question
The two faces of every transaction — and the rules of debit and credit applied to the five account types (assets, liabilities, equity, revenues, expenses). The module covers the DEAD CLIC mnemonic, the journal entry as canonical form, why revenue accounts behave like equity accounts and expense accounts like negative-equity, and worked examples for the dozen most common transactions a small business sees. The closing exercise journals twelve transactions from a week of trading.
Outcome
The student can write a journal entry for any of the dozen most common transactions (cash sale, credit sale, cash purchase, credit purchase, payment to supplier, receipt from customer, taking a loan, repaying a loan, paying wages, paying rent, depreciation, owner's drawing), demonstrate that total debits equal total credits, and apply the DEAD CLIC mnemonic without reference. (Double-entry mechanics)
Practice scenarios
You will write the journal entries for a sequence of twelve transactions in your friend's first month of business (the same friend from Module 2). The transactions: (1) Owner deposits £10,000 into business bank. (2) Buys laptop for £1,200 cash. (3) Buys £3,000 inventory on 30-day credit. (4) Sells inventory cost £500 for £800 cash. (5) Pays £600 cash to the supplier (partial settlement). (6) Takes £15,000 loan from parents into bank. (7) Pays £400 wages cash. (8) Receives £200 customer deposit cash. (9) Pays £50 software subscription cash. (10) Owner takes £500 cash for personal use. (11) Receives £700 cash from a customer for goods sold last week (no invoice yet recorded). (12) Records £100 depreciation on the laptop for the month.
Your goals