Definition: Double entry book keeping is the system of keeping account, which take advantages of the two-fold aspect of every transaction, whereby one account that receives is debited and another account, which gives, is credited.

The following simple rules of double entry should be fully understood and memorized.

  1. for every credited entry in an account there must be a corresponding debit entry in another account.
  2. For every debit entry in an account, there must be a corresponding credit entry in another account.
  3. All transactions must be recorded in two accounts, one account is debited and another account credited.



  1. Any transaction involves two accounts.
  2. Receiving account or receiver.
  3. Giving account or giver.
  4. Dr. Receiving account With value it receives
  5. Cr. Giving account With value it gives out.


Illustration: Complete the following table. Account to be.

Debited Credited
i. Start business with N800 cash Cash Capital
ii. Goods sold on credit to Mr. Ayo Ayo Sales
iii. We paid creditor Mr. Olu by cheque Mr. Olu Bank
iv. Goods bought by cheque Purchases Bank
v. Sold goods for cash Cash Sales
vi. Goods were returned to Mr. Kufor Kufor Returns Outwards
vii. Biodun lent us N80 cash Cash Loan (Biodun)
viii. Took N20 of the cash and paid into the bank Bank Cash
ix. Bought a motor van by cheque Motor van Bank
x. Goods were returned to Olotu Olotu Returns Outwards
xi. Paid further cash into the business as capital Cash Capital




Posting is the act of using one book as a means for entering the items to other accounts so as to complete double entry. When applying the principle of double entry, students are advised to write up the cash book first and then transfer to the ledgers.

Rules to be followed

  1. All items on the debit side of the cash book must be transferred to the credit side of individual ledgers.
  2. All items on the credit side of the cash book must be posted to the debit side of individual ledgers



Enter the following in a two column cash book. Balance off at the end of the month and post to all necessary ledgers.

June 1: Started business with cash N3,200

June 2: The following paid us by cheque, Okon N500 : Abbey N600

June 3: Cash sales paid directly into the bank N400

June 5: Paid rent by cash N180

June 6: We paid the following account by cheque; Sope N520 : Ladi N300

June 7: Withdrew cash from the bank for business use N70

June 8: Commission received by cheque N450

June 10: Banked cash N150

June 12: Withdrew cash from bank for personal use N30

June 15: Paid wages by cash N250

June 16: Bought motor van by cheque N20

June 18: Cash sales N1,000

June 20: Bought stationery paying by cash N170

June 22: Received N200 cheque from Okete

June 23: Cash purchases N550

June 24: Cash drawings N120

June 25: Bought goods by cheque N115

June 27: Yinka lend us N1,020 cash.

June 28: Paid motor expenses by cheque N18

15 Places to WIN $10,000
15 Places to WIN $10,000 Cash

June 30: The proprietor put further cash N1,320 into the business as capital.



  1. Write up the two column cash book in simplified and amplified book-keeping and accounting page 56 revision question 5x.

Note: Post the entries from the prepared two column cash to all relevant ledger account

  1. You are required to write up the accounts for the following transactions.

Jan. 1          Started business with N12,000 in the bank.

Jan. 2          Bought stationery on credit from Okete N200

Jan. 3          Bought goods on credit from Ogundele N3,000

Jan. 6          Paid rent in cash N30

Jan. 8          Sold goods on credit to Ajala N500

Jan. 12        We returned goods to Ogundele N150

Jan. 19        Paid wages in cash N30.


See also



Single Column Cash Book

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