Posting into a Ledger using Double-Entry System – Example 1

Open the necessary ledger account for the following business transactions using the Double entry system.

On Feb. 1, 2020, Kayode started a business with 50,000 cash.

Solution

Step 1:

• Identify the two accounts

Kayode’s capital A/C and A/C

Step 2:

• Which A/C is receiving and giving?

Kayode’s capital A/C is giving while cash A/C is receiving.

Step 3:

• Apply the Double-entry principle which is to debit the receiver and credit the giver.

Step 4:

• Draw the “T” a/c and do the posting.

Please Note: The word “started”, implies capital A/C