The Accounting Equation and Double-Entry Bookkeeping

What the page covers

The resources follow the path a transaction takes. They begin with the accounting equation, then move to double entry, books of prime entry, ledgers, the trial balance and the correction of errors. Flashcards, mind maps, quizzes, slides and notes all sit side by side.

Where to start

If the ideas are new, begin with the flashcard decks Bookkeeping Level 1 and Basics of Double Entry. They define accounts, ledgers, assets, liabilities, capital, debtors and creditors, and explain how income and expenditure are classified. Then open the mind map The Accounting Equation to see how the pieces fit together.

1. Read the equation resources first.
2. Move to double entry and the journal, using the Journal entries deck for worked examples such as opening a business bank account or buying a shop.
3. Look at the books of original entry, such as the purchases day book, which lists credit purchases compiled from invoices.
4. Finish with the trial balance and error correction.

Using quizzes and maps together

Read a mind map first, then test yourself. The quiz FIA FA1 Recording Financial Transactions (Mock 1) asks what the accounting equation is and what the correct double entry is for goods bought on credit. If a question catches you out, go back to the matching map. The mind map Trial Balance & Errors explains that a trial balance is an arithmetical check on the double-entry system, and it pairs well with the notes on errors a trial balance can detect.

Where it sits

This unit belongs to the Accounting Foundations strand of Accounting and auditing. Some resources are aimed at AAT study, including a Level 3 mind map and notes, so professional candidates will find material to work with. Others suit GCSE Business or university courses.

When you are ready, choose one resource, work through it, and then build your own flashcards or maps from what you found hardest.