DOUBLE ENTRY PRINCIPLE

ASSET=CAPITAL +LIABILITY

ASSET=DR ACCOUNT – INCREASE IN ASSET=DEBIT    DECREASE IN ASSET =CREDIT

CAPITAL= CREDIT ACCOUNT-INCREASE IN CAPITAL =CREDIT    DECREASE IN CAPITAL =DEBIT

LIABILITY=CREDIT ACCOUNT- INCREASE IN LIABILITY=CREDIT   DECREASE IN CAPITAL=DEBIT

EXPENSES= DEBIT ACCOUNT- INCREASE IN EXPENSE=DEBIT    DECREASE IN EXPENSE=CREDIT

SALES= CREDIT ACCOUNT- INCREASE IN SALES=CREDIT DECREASE IN SALE =DEBIT

INCOME = CREDIT ACCOUNT

LTD has the following information  at the end of the year

a.      CASH  N3,000,0000

b.      BANK      6,400,000

c.      CAPITAL   6,000,000

d.      RENT        400,000   

e.       BUILDING  600,000  

f.       PLANT/MACHINERY 600,000

g.     MOTOR VEHICLE 400,000

h.   PROVISION FOR   DEPRECIATION  300,000

.-                    STATE IF THE ITEM  IS DEBIT OR  CREDIT

i-.                   PREPARE  A TRIAL BALANCE

(II)

(III)

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