To hate double entry bookkeeping?

[SunFlowerRose]

I’m really hoping you will be able to help me, because this is my last ditch attempt before I throw away 8 months worth of payments on a bookkeeping and accounting course which would cost even more in an early get out fee.

I work full time in finance for a small company, but they use an accounting software so most of it’s all done in the background.

I’m on the first model of the level 2 online course and I just cannot retain the information or make it sink in.

The double entry part and transactions just isn’t making sense and I’m about to lose all hope on it.

If anyone has any resources that helped them such as YouTube videos, links or books then please please do share them.

I’m off to WH Smith later to look at the books they have, in hopes to find one that may help. Along with A3 paper that I plan to right notes on and stick all over the house.

If any bookkeepers would be willing to inbox me and help me with this I’d be super grateful.

I’ve wasted 8 months on this so far and just feel incredibly stupid. And I want this so badly for my current career, it would help me progress so much.

Apologies for putting it in AIBU I was hoping more people would see it and maybe be able to help. Please be kind as I already feel crap enough.

Debit the receiver, credit the giver

Always worked for me. So if you get money into a bank account, it's a debit on the T account because that Account is receiving it.

It's a credit on your bank statement because the bank owe it to you so it's more equivalent to a creditor account as far as they're concerned,

Can you borrow "accounting for dummies" from the library? I don't know if it will help so probably not worth buying it til you've had a look but that really helped me.

Doing Drs and Crs confused me for ages, it took a long time for me to understand it.

What I ended up doing to start with was doing it as "increase" and "decrease" and then fitting the debits and credits on later.

E.g. the first principle is the debits and credits of every transaction add up to zero.

So say we sell something for cash: we know we need to increase cash by e.g. £10 and sales by £10.

So we know cash is an asset, which means under DEAD CLIC, increasing an asset is a debit. That means we know we have to debit cash £10. Give. The debits and credits add up to zero we then know this:

Increase cash: DR Cash £10
Increase sales: ? Sales £10.

So then we know we must have to credit sales, because that's the only way the debits and the credits of the transaction add up to zero.

@SunFlowerRose

Ok so let’s look at another one.

If I purchase something on a 30 day credit account would it be…
Debit to the assets?
Credit to the purchase ledger?

Then once paid would it be..
Debit to purchase ledger
Credit to bank?

Yeah, you have that one right

Debit the asset/expense depending on what youbhave bought
Credit the liability (the creditor/payable)

Then when paid you are
Debiting that liability to clear it
Crediting the bank to reduce your cash balance

When I first started to learn bookkeeping I used to get confused as the way I looked at my bank account and the terminology I used seemed to be at odds with debits and credits, but I soon got used to it.

If you think about it along the lines if you receive something be it physical or a service that will be a debit, and the opposite entry will be a credit.

So in your example above if you buy a PC you physically have an asset (the PC) so that will be a debit and you will have reduced the money in your bank account so that will be a credit to that account.

If you pay your electricity bill, you have received electricity, an expense, so a debit and again reduced the money in your bank account, a credit.

With sales you receive money so increased your bank account, a debit, and provided someone else with an asset or service so a credit for you. If someone doesn’t pay immediately the debit entry would be to debtors. When you receive the money you would debit your bank account and reduce (credit) debtors.

You’re saying it isn’t sinking in with DEADCLIC - it will you just need to give it more time.

When I first started AAT I would overthink it and put things on the wrong side but I think if you just don’t over complicate it or overthink it and accept that to begin with you might not understand why a liability is a credit but just accept that it is - eventually you’ll get there.

So for example you have a loan of 30000 and 15000 in your bank. To pay back 5000 of that loan your credit your bank by 5000 because you’re reducing your asset (being the 15000 currently in the bank) and you’d debit the loan because you’re decreasing that liability.

I recommend a book called double entry or double Dutch - helped me loads

@MartyHart

Think of the bank being the wrong way round. That really helped me. It's from their point of view iyswim

This is what helped me the most tbh.

@SunFlowerRose

Ok so let’s look at another one.

If I purchase something on a 30 day credit account would it be…
Debit to the assets?
Credit to the purchase ledger?

Then once paid would it be..
Debit to purchase ledger
Credit to bank?

Your are purchasing something. What is it? Because it’s either an normal expense or an asset. BOTH are debits but the type of purchase is what determines whether expenses or assets are debited.

So you have the opposing credit.

If you are paying immediately with no credit account you just credit the bank. Job done.

But this is a credit account - a creditor. So your credit goes here and goes into the pot of all items due to be paid at some point.

When you’re ready to pay what is happening? Cash out so you credit cash and the debit goes to creditors to reduce the liability in creditors.

I with you. Luca Pacioli is a dick.

Get a pad of A3 paper, turn it sideways. Grab pencils pens and felt tips.
Make it colourful!
Draw wee pictures of money, stuff you buy, then picture what happens to it- using that D acronym.

Then do lots of worked examples.

You will get it

@SunFlowerRose

Aprilx I think it confuses me that when you receive money into the bank it’s classes as a debit, and then whatever was paid is classed as a credit, so for example Cost of Goods Sold?

I think because I spend 8 hours a day at work staring at spreadsheets and invoices and dealing with stuff that takes concentration, by the time I get home and try and focus on learning this my poor brain is done.

I would recommend you stop trying to rationalise that particular part of accounting. I think I got an explanation for it when I started out thirty years ago, but mainly I accept that it is an accounting convention that assets are debits and liabilities are credits.

So if you get more assets you need to dr assets, whereas if you get rid of / spend some, then it is going down so your asset is credited.

Look here:

opentuition.com/fia/fa1/?amp

Free open source accounting tutorials with associated YouTube tutorials - they’re quite good. A bit dry. But it IS accountancy… 🤷🏾‍♀️

I came into bookkeeping and accounting after spending 18 years in banking/finance. The biggest challenge for me was posting debits and credits in the reverse way. In the early days I had to check myself constantly as my brain was programmed to banking.

I used to just remind myself in the early days:

“Debit all that comes in and credit all that goes out.”

then allocate accordingly DR income (loans, sales, grants etc) CR outgoings/expenses (salaries, loan repayments, vat, etc).

I'm not sure if that's any help and I might be 'teaching granny to suck eggs' with the above simplified explanation but I do feel your frustration.

I would recommend you stop trying to rationalise that particular part of accounting. I think I got an explanation for it when I started out thirty years ago, but mainly I accept that it is an accounting convention that assets are debits and liabilities are credits.

I agree wholeheartedly with this. Learn and accept the definitions. It is what it is and once you get it and move forward it will crystallise.

It’s easier if you’re just buying something out of the bank because that’s a simple debit expense credit bank but I do remember feeling it was more complicated when the PLCA and SLCA came into it.

PLCA is a liability because it’s money you owe and will sometime have to pay so to increase the amount you credit it. Just the way you’d be crediting the bank if you’d paid there and then.

SLCA is an asset because it’s money that’s owed to the company. So to increase an asset you debit it.

My tips

Don't think about your bank statements. T account for bank is just money in (dr) and money out (cr)

You can always make another t account. So if you buy a skirt you can create a t account called 'skirt'. Debit skirt, credit bank.

Depreciation accounts are horrible - just learn it by rote.

Hi, you can use PEARLS PEA/RLS to help you remember Dr is Purchases, Expenses, Assets then Cr Revenue, Liabilities and Sales.

Try thinking of whether it is "better" or "worse" for the company - better being more profit/ more assets.

It it's better for the company, you always have a Cr on the P&L and Dr on the balance sheet.

If it's worse for the company, you have a Dr on the P&L and Cr on the balance sheet.

So a purchase is worse for the company (lower profit, less net assets), so Dr P&L, Cr balance sheet (trade creditors).

Paying a supplier is both better and worse - you don't have a creditor any more so Dr balance sheet (trade creditors), but you have less cash so Cr balance sheet (cash).

@BreasticlesNotTesticles

My tips

Don't think about your bank statements. T account for bank is just money in (dr) and money out (cr)

You can always make another t account. So if you buy a skirt you can create a t account called 'skirt'. Debit skirt, credit bank.

Depreciation accounts are horrible - just learn it by rote.

For depreciation, following my better/ worse example, depreciation is "worse" for the company, because it reduces the value of the asset, so Dr P&L depreciation, Cr balance sheet depreciation

ACOWtancy is a great learning provider. Whilst they don’t cover AAT per se, they do cover CAT (which is ACCA’s equivalent).
They do have some free resources which may help guide you through Double Entry Book keeping.
www.acowtancy.com/papers/cat-ffa/
It is very cartoon and short videos in nature, but I found this far more refreshing and I used them for my final ACCA exam, finding their methods far more effective than many other tutor services I’d used previously.
Please feel free to DM me if I can help at all, chat through any questions etc. Please don’t give up! I’ve been there and at times it can be super tricky, but sometimes you just need a different way of looking at it.
Good Luck!

I always went back to the bank as my starting point. And I remembered it as ‘credit’ money being spent so out the bank like a credit card.
First intuition have free revision sessions level 2 is basic book keeping. They are recorded so don’t have to watch them live.

Sympathy. I did a module at university thinking I would get it as I'm a mathsy type. I found a lot of the terms a bit counterintuitive and I found financial accounting hard. It was mostly a matter of revising it and getting definitions feeling natural, but it took a while. I passed the exam!

DC ADE LER - remember it! It helped me Hugely!

Have a look at Cpd strength on YouTube, honestly, I would of failed if it hadn’t been for his videos. Good luck

Loads of great advice on here, but don't give up! I've been an accountant for 30 years and I reckon it took 5 years for it to be second nature, mainly because you barely use it at work when computers do it all.
My way of looking at is that double entry simply shows where the money came from and where it's gone to. Debits are always to, and credits are from eg you buy a widget so the money comes from the bank account into widgets. Dr widgets (purchases) and cr bank. Your sister lends you a fiver: Dr purse, cr sister loan.

I used to think of in (debit) and out (credit). I used to think back to the bank, if it was going out of there it was going in some where else. Keep going, you will get it x