Flow Chart and Accounting Entries

1) Flow Chart

2) Accounting Entries

In double entry bookkeeping, debits and credits are entries made in account
ledgers to record changes in value due to business transactions.

Each transaction’s debit entries must equal to its credit entries.

Example

1. The company purchase equipment and pay by cheque.
   
   Debit Fixed Asset (increase in asset)
   Credit Bank (decrease in asset)
   


2. The company pay the creditor by cheque for outstanding invoices,
   
   Debit Creditor (decrease in liability)
   Credit Bank (decrease in asset)
   
   
3. The company receive cheque for a cash sale.
   
   Debit Bank (increase in asset)
   Credit Sales (increase in Revenue)
   


4. The company pay rent with cheque
   
   Debit Rental (increase in expense)
   Credit Bank (decrease in asset)
   


5. The company receive cheque from shareholders for increase capital.
   
   Debit Bank (increase in asset)
   Credit Share Capital (increase in Capital)
   


6. Sales Flow chart