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 DUALITY CONCEPT
Every business transaction has an effect on the accounting
equation – asset, liabilities, owner’s equity.

Each transaction has a dual effect, and this effect is

recorded in the accounts in the accounting system

Thus, a change in any item in the equation is followed by

another change which is equal but of opposite effect to
another/same item.
ACCOUNT
 An account is a chronological record of the
increases and decreases related to an item,
whether the item is an asset, a liability, an
owner’s equity, an expense or a revenue
 An account is found in the ledgers.
 An account is called a T account since it is
shaped like a T.

Account Name
Debit side Credit side
 THE T ACCOUNT

Account Name
Date Particulars Amount Date Particulars Amount

 Date column – to record date of transaction

 Particulars column – to record the related account
 Amount column – to record amount of money
RULES OF DOUBLE ENTRY

Asset accounts are

 increased by debiting and decreased by crediting the relevant asset T
account.
Liability and owner’s equity accounts are
 increased by crediting and decreased by debiting the relevant liability
and capital T accounts.
Expense accounts are
 increased by debiting and decreased by crediting the relevant expense T
account.
Revenue accounts are
 increased by crediting and decreased by debiting the relevant revenue T
accounts.
RULES OF DOUBLE ENTRY – A SUMMARY

Account Name
Increase in assets Decrease in assets
Increase in expenses Decrease in expenses
Increase in drawings Decrease in drawings
Decrease in liabilities Increase in equity
Decrease in equity Increase in liabilities
Decrease in revenues Increase in revenues
RULES OF DOUBLE ENTRY – A
SUMMARY
Account Type To Record Entry in Account
Asset An increase Debit
A Decrease Credit

Expense An increase Debit

A Decrease Credit

Capital An increase Credit

A Decrease Debit

Drawings An increase Debit

A Decrease Credit

Liability An increase Credit

A Decrease Debit

Revenue An increase Credit

A Decrease Debit
RULES OF DOUBLE ENTRY – A
SUMMARY

A+D+E = C+L+R

DEBIT CREDIT

CREDIT DEBIT
EXAMPLE ON THE EFFECTS AND DOUBLE ENTRY
EXAMPLE:
1) 1 Jan 2018, Amin started the business selling books and
deposited cash in bank, RM 50000.
2) 1 Feb 2018, business purchase furniture and issued a cheque of
RM 2600 for payment.
3) 12 June 2018, purchase fixture and fittings from Faiz, RM 1000
and promised to pay later.
4) 15 October 2018, paid the amount owed to Faiz by issuing a
cheque, RM 500.
1) 1 Jan 2018, Amin started the business selling books and
deposited cash in bank, RM 50000.
A+D+
= C+L+R
E
DEBIT CREDIT

CREDIT DEBIT

EFFECT DOUBLE ENTRY

Asset: Increase Dr Bank

Owner’s equity/ capital: Cr Capital
Increase
2) 1 Feb 2018, business purchase furniture and issued a cheque of RM
2600 for payment.
A+D+
= C+L+R
E
DEBIT CREDIT

CREDIT DEBIT

EFFECT DOUBLE ENTRY

Asset: Increase Dr Furniture

Asset: Decrease Cr Bank
3) 12 June 2018, purchase fixture and fittings from Faiz, RM
1000 and promised to pay later.
A+D+
= C+L+R
E
DEBIT CREDIT

CREDIT DEBIT
EFFECT DOUBLE ENTRY

Asset: Increase Dr Fixture & Fittings

Liability: Increase Cr Faiz
4) 15 October 2018, paid the amount owed to Faiz by issuing a
cheque, RM 500.
A+D+
= C+L+R
E
DEBIT CREDIT

CREDIT DEBIT

EFFECT DOUBLE ENTRY

Liability: Decrease Dr Faiz

Asset: Decrease Cr Bank
CONTINUED:
5) 15 Jan 2018, purchased goods on credit from Abu RM 500
6) 13 Feb 2018, purchase stocks RM 200 by cash.
7) 22 June 2018, sold goods on credit to Ahmad RM 150
8) 5 July 2018, Ahmad paid amount owed by cheque.
9) 10 July 2018, sold goods RM 120 by cash.
10) 25 October 2018, paid electricity bill RM 70 by cash
11) 21 November 2018, received dividend RM 15 by cash
12) 1 December 2018, owner took cash RM 50 for personal use.
5) 15 Jan 2018, purchased goods on credit from Abu RM 500

A+D+
= C+L+R
E
DEBIT CREDIT

CREDIT DEBIT

EFFECT DOUBLE ENTRY

Expense: Increase Dr Purchase

Liability: Increase Cr Abu
6) 13 Feb 2018, purchase stocks RM 200 by cash.
A+D+
= C+L+R
E
DEBIT CREDIT

CREDIT DEBIT

EFFECT DOUBLE ENTRY

Expense: Increase Dr Purchase

Asset: Decrease Cr Cash
7) 22 June 2018, sold goods on credit to Ahmad RM 150

A+D+
= C+L+R
E
DEBIT CREDIT

CREDIT DEBIT

EFFECT DOUBLE ENTRY

Asset: Increase Dr Ahmad

Revenue: Increase Cr Sales
8) 5 July 2018, Ahmad paid amount owed by cheque

A+D+
= C+L+R
E
DEBIT CREDIT

CREDIT DEBIT

EFFECT DOUBLE ENTRY

Asset: Increase Dr Bank

Asset: Decrease Cr Ahmad
9) 10 July 2018, sold goods RM 120 by cash.

A+D+
= C+L+R
E
DEBIT CREDIT

CREDIT DEBIT

EFFECT DOUBLE ENTRY

Asset: Increase Dr Cash

Revenue: Increase Cr Sales
10) 25 October 2018, paid electricity bill RM 70 by cash

A+D+
= C+L+R
E
DEBIT CREDIT

CREDIT DEBIT

EFFECT DOUBLE ENTRY

Expense: Increase Dr Electricity

Asset: Decrease Cr Cash
11) 21 November 2018, received dividend RM 15 by cash

A+D+
= C+L+R
E
DEBIT CREDIT

CREDIT DEBIT

EFFECT DOUBLE ENTRY

Asset: Increase Dr Cash

Revenue: Increase Cr Dividend
 12) 1 December 2018, owner took cash RM 50 for personal use.

A+D+
= C+L+R
E
DEBIT CREDIT

CREDIT DEBIT

EFFECT DOUBLE ENTRY

Owner's equity: Decrease @ Dr Drawing

Drawing: Increase @ Cr Cash
Capital: Decrease
Asset: Decrease