Accounting – 2.1 The double entry system of book-keeping | e-Consult
2.1 The double entry system of book-keeping (1 questions)
Login to see all questions.
Click on a question to view the answer
Journal Entry:
| Date | Account Debited | Account Credited |
| [Date of Purchase] | Equipment | Bank (Cheque) |
Explanation:
- Equipment is an asset, and assets are increased with a debit. Therefore, Equipment is debited for £5,000.
- Bank (Cheque) is a liability (representing the money owed to the bank), and liabilities are decreased with a credit. Since the company is paying by cheque, the bank balance is reduced. Therefore, Bank (Cheque) is credited for £5,000.