Double entry accounting explained

[@shara4201]

And I'm here studying at the last minute since I have business exam tomorrow 🤡

[@TheFinanceStoryteller]

Wishing you lots of success!!!

[@vincentnnaemeka3105]

Did you pass? Lol

[@shara4201]

@@vincentnnaemeka3105 yesss thanks to this 😭♥️

[@MuhummadKhan539]

Omg me too😂😭

[@vincentnnaemeka3105]

@@shara4201 😀😀😀

[@carlos.caparas]

Taking an Accounting In Healthcare Class right now and your videos have been amazing, helping me understand these concepts. Thank you so much!

[@TheFinanceStoryteller]

That sounds like an interesting class, Carlos! Thank you very much for the kind words. Please spread the word about the channel to fellow students. This playlist might have more topics that could be helpful for you: kzbin.info/www/bejne/mGqWfHWjmL2UpKs Wishing you lots of success in your studies.

[@TheFinanceStoryteller]

Enjoyed this explanation of double entry accounting? Then subscribe to my channel, and watch the related video on the accounting equation kzbin.info/www/bejne/hYrUnWqPbrOheMk and the video on debits and credits explained by using DC ADE LER kzbin.info/www/bejne/mGqWfHWjmL2UpKs

[@adrianamicheal1672]

Studying IBM ( international business management) right now and im so grateful i found this Chanel. Thank you so much from Ethiopia :)

[@TheFinanceStoryteller]

Thank you! Greetings back from the Netherlands. Wishing you lots of success in your studies. Please share the link to the channel with fellow students.

[@MuhummadKhan539]

This is literally the best and most informative helpful video on KZbin!!!😄💙

[@TheFinanceStoryteller]

Glad you think so! There are more videos on related topics in the Accounting 101 playlist: kzbin.info/www/bejne/mGqWfHWjmL2UpKs

[@roar3330]

Revising for my acccounting module, if I pass my exam I would say this channel teach me more than my lectures :)

[@TheFinanceStoryteller]

Wishing you lots of success with the exams, I hope all of the videos in this playlist will be useful: kzbin.info/www/bejne/mGqWfHWjmL2UpKs

[@sonanadirova5687]

This video teach me more than my lecturer have tought me during one semester. Thank you so much😇

[@TheFinanceStoryteller]

Happy to help!!!! More useful stuff available in my Accounting 101 playlist: kzbin.info/www/bejne/mGqWfHWjmL2UpKs&pp=gAQBiAQB Take a look which videos could be useful for you.

[@ilsigniore2260]

i've taken AS accounting with no previous knowledge and this is kind of helping.

[@TheFinanceStoryteller]

Good to hear! One step at a time. ;-) Have a browse through my Accounting 101 playlist, and see which other videos could be helpful kzbin.info/www/bejne/mGqWfHWjmL2UpKs

[@infini.tesimo]

This helped me overstand some more about how this works when it comes to Bills of Exchange. Been diving deep into this for discharging debts and making resources for people to learn from. Thank you!

[@chefkuyajoey]

Thank you for the clear explanation! 👌🏻

[@TheFinanceStoryteller]

Happy to help! Thank you for watching and commenting.

[@Quran_lab1989]

thank you for the clear explanation

[@TheFinanceStoryteller]

Happy to help! More good stuff (related topics) in the Accounting 101 playlist: kzbin.info/www/bejne/mGqWfHWjmL2UpKs&pp=gAQB

[@Quran_lab1989]

thanks the playlist is really help full it will be great if you can make a video of petty cash

[@godjaygaming5675]

Thanks for the amazing video. I was clearly able to understand what you said. Helps a lot!

[@TheFinanceStoryteller]

Thank you very much for the kind words! Happy to help. There might be more useful videos for you in my Accounting 101 playlist: kzbin.info/www/bejne/mGqWfHWjmL2UpKs

[@accountingforbeginners9210]

You know how to teach,well done

[@TheFinanceStoryteller]

Thank you very much! Wishing you lots of success on your own journey.

[@SPEEDBOAT40PS]

I really love your channel and appreciate your hard work! Could you make a video about bad debts (allowance method, direct write offs)? Because I couldn't find a video on this topic...

[@TheFinanceStoryteller]

Thank you very much for the kind words! Bad debt did come up (in passing) in the video about Contra Accounts kzbin.info/www/bejne/n6nOlamFiZyNeqs And yes, I might make a specific video about bad debts in the future! ;-)

[@SPEEDBOAT40PS]

The Finance Storyteller Ah thanks for the quickly response! I just have seen the contra accounts video and yes it’s a great video (as always) but I think there are some points in the topic of bad debts that should be discussed in more detail (direct write-offs, allowance method...) And again: I love your videos and please keep going! Informative, focused and no unnecessary information! You could replace the professor at my business school, or are you a even a professor?!

[@TheFinanceStoryteller]

Thank you very much! I am honoured! I am not a professor, but I do teach "finance-for-non-financials" programs, and run business simulations as part of leadership development programs, at corporate clients. The Finance Storyteller KZbin channel started off as an extension of that: bonus material for the participants. I guess that after 100+ videos it has gained a stand-alone status. :-) Please spread the word with your fellow students! ;-) I will put "bad debt accounting" on the "to do" list of topics, and hope to get to it soon! Thanks for the suggestion.

[@TheFinanceStoryteller]

Done! Bad debt accounting made and uploaded: kzbin.info/www/bejne/p2i6maWVdpmXqKc

[@philr3630]

very good videos. KZbin seems to rearrange out of an order that makes sense for a newby. You may want to place a number in front of each title so we can go in order. ty

[@TheFinanceStoryteller]

Thanks for the kind words and the suggestion! I have rearranged my "Accounting 101" playlist a bit, to have a more logical flow from one topic to the next. I am also fine with viewers skipping some of the videos, in case there is an overlap, or if they are already knowledgeable in that area. Whatever works for each individual! I will not change the video titles, as that might hurt their ranking in the search results in case viewers are only looking for one specific topic.

[@ahmedzaky7507]

what amazing,thank you so much

[@TheFinanceStoryteller]

Very nice to hear that! Thank you for watching and commenting.

[@pasufi]

The Tangible Assets, Liabilities and Cash are all good! It is the Intangible Assets and Goodwill that an investor has to worry about, as these are the accounts which unscrupulous managers can debit with "hot air" and "jingle bells"!

[@TheFinanceStoryteller]

Intangible Assets kzbin.info/www/bejne/Y4Xdknpji6llfbc and Goodwill kzbin.info/www/bejne/r6Kcop15orqZiZY are indeed more subjective, but they do have their role to play in accounting. If the sum of both of these is more than 50% of the balance sheet total, I tend to get very suspicious too! See the links I pasted above for in-depth reviews.

[@pasufi]

@@TheFinanceStoryteller Your videos are excellent. However, my comment was based on what Charlie Munger is reported to have said - “The liabilities are always 100 percent good. It’s the assets you have to worry about.” I hope my statement makes sense without rejecting the role of "Goodwill" and "Intangible Assets" in a financial statement . An investor has to be cautious about these as the value of these are subjective, unlike the Liabilities and Cash, the value of which are more objective! Thank you for your excellent videos.

[@TheFinanceStoryteller]

Thank you very much for your kind words! Charlie was right, may he rest in peace! Have a look at my video on asset impairment, it talks about the fragility of some of the main asset categories on the balance sheet: kzbin.info/www/bejne/ooiwdZeqfatnkLc Even cash isn't always safe, as was confirmed in 2023 with the Silicon Valley Bank case.

[@lesichyre9314]

Is there a textbook that complements this information? If you have not written one, then is there a recommended one that someone else has published?

[@TheFinanceStoryteller]

Hi Lesi! I only make videos (on a lot of different topics), and do not write textbooks.... If you are looking for a short book on finance, I can recommend "finance for non-financial managers" by Gene Siciliano, or the Sunday Times book "How to understand business finance".

[@caz.x_x]

idk if this is a dumb question by me but is the cash deducted from the assets because its equity?

[@TheFinanceStoryteller]

Recording a credit to cash in a journal entry means that cash has left the company, and the balance goes down. The journal entry example I use in this video is quite a complicated one. It's probably easier to run through the steps of my "income statement and balance sheet relationship" video in order to understand how things relate to each other: kzbin.info/www/bejne/rYvHkol7jZlkjbM

[@denisa.4341]

Sir can I ask you advice? I am try to get a job as senior accountant. I will have a excel exam and they mentioned that they will ask trial balance in excel plus double entery. What they can ask about? Find a balance ?

[@TheFinanceStoryteller]

Very hard to predict the specific questions they will ask. To be on the safe side, have a look at a few of these related videos on trial balance, adjusting entries, closing entries, etc.: kzbin.info/www/bejne/iaGkqHyViLh3frs&pp=gAQBiAQB

[@denisa.4341]

@@TheFinanceStoryteller Dear Sir, Thank you very much for advice:)

[@SuperJamalShah]

How come you're subtracting assets from an asset (cash) or debits from a debit (cash). Isn't cash an asset? Shouldn't cash be on the debit side vs. the credit side of the equation?

[@TheFinanceStoryteller]

Hello Jamal! Yes, cash is an asset. The natural state is for an asset account to have a debit balance. The account balance goes up when you debit it, and goes down when you credit it. The transaction I am describing in this video has cash leaving the company, hence the credit entry to the account. With the T-accounts that I was drawing, I only highlighted the journal entry, NOT the total account balance or flow in the cash account. Does that help?

[@kaylajay975]

Thanks for helping me

[@TheFinanceStoryteller]

You're welcome, Hafsat!

[@bigboyspy]

very helpful thank you.

[@TheFinanceStoryteller]

You're welcome! Here's the link to my "Accounting 101" playlist: kzbin.info/www/bejne/mGqWfHWjmL2UpKs

[@jacabobhappylife766]

What is "journal" exactly? Some sources say: 1) "daybooks" come first, which is where you post prime entries i.e. follow single-entry accounting 2) "journals" are next which groups the transactions into accounts, posting journal entries i.e. following double-entry accounting Other sources say: 1) "journals" come first, which is where you post journal entries i.e. follow single-entry accounting 2) "ledgers" are next which groups the transactions into accounts, posting entries that follow double-entry accounting So I know daybooks are 1st with single-entry, and ledgers come after with double-entry......but journals...different people seem to use this word very differently. Why???

[@TheFinanceStoryteller]

Daybooks, journals and ledgers are ancient terms, from before the days of computing. I wouldn't get too worked up about them, hardly anybody uses these in the real world. The main thing in today's world is transactions that are made in subledgers (which get posted to the general ledger through accounting transaction tables: if a sale is made on credit to a customer (subledger) then post journal entry debit accounts receivable credit revenue (general ledger)). My video on the general ledger discusses that: kzbin.info/www/bejne/jZXEYX5vaLOeZsU

[@jacabobhappylife766]

@@TheFinanceStoryteller Thank you 🙂

[@maearianboter6052]

Thank you!

[@TheFinanceStoryteller]

You're welcome! :-)

[@monkizaki1440]

You’ve couldve at least defined the terms credit and debit before going into the information. I understood nothing.

[@TheFinanceStoryteller]

Then take a step back and start off with this video explaining debits and credits: kzbin.info/www/bejne/pF7PdJdpib90bq8

[@ThePinkardo]

why are you subtracting cash if it is an asset?

[@TheFinanceStoryteller]

Hi Oliver! This example is related to another video on intangible assets kzbin.info/www/bejne/Y4Xdknpji6llfbc for the acquisition of a company. The acquiring company is paying in cash, therefore cash goes down, and the asset (cash) on the balance sheet needs to be credited. More discussion on debits and credits: kzbin.info/www/bejne/pF7PdJdpib90bq8

[@kenesufernandez1281]

✨❤

[@cakewingdaisy3396]

This just explained the same thing my teacher took an hour to explain and put it into 4 minutes

[@TheFinanceStoryteller]

You're welcome, Daisy! Please spread the word to your fellow students. :-)

[@cakewingdaisy3396]

@@TheFinanceStoryteller will do 💕 thanks a ton

[@Dessertsoulss]

Hello sir!! Sir can you please teach me how to do cash books and petty cash books? I'm a high school accounting student and I need help in it 😢🙏

[@TheFinanceStoryteller]

Hello! No, that's not something that I have expertise on.

[@Dessertsoulss]

@@TheFinanceStoryteller Oh its alright Sir!! Then uhm can you please make a video on teaching how to make suspense accounts??

[@TheFinanceStoryteller]

Yes, my suspense account video can be found here: kzbin.info/www/bejne/bZCmc6COmK94aLs

[@Dessertsoulss]

@@TheFinanceStoryteller Thankyou sir 😊

[@FavianTubeX]

thanks!

[@TheFinanceStoryteller]

You're welcome! :-)

[@samuelmanalili6476]

The black backdrop of the subtitles obstruct the tutorials' script

[@TheFinanceStoryteller]

Sorry about that, Samuel! I mostly try to stay away from the bottom of the page, but sometimes I need the space.....

[@TalimSahl]

Good

[@TheFinanceStoryteller]

Thank you! :-)

[@HIDlarissaTERRY]

thank you ;)

[@TheFinanceStoryteller]

You're welcome! Happy to help.

[@KoT0r1-]

I am confused on why the outside service expenses will drop the equity, as equity is what the owner own and lability is what the owner owe, if we decrease equity coz the expenses and increase liability coz the payable, doesnt this mean a double loss for the owner ? Even though in equation the asset stay the same

[@TheFinanceStoryteller]

Hello there! Good question. Expense accounts are part of a category of accounts called "temporary accounts", where the account balance needs to be “reset” to zero through closing entries at the end of the period. The balances are transferred to the income summary account, which in turn gets closed out to retained earnings (which is part of equity). Then you can start the new year with all income statement accounts at zero. For more detail, see this video: kzbin.info/www/bejne/eYnMfH-ql5ynp6s

[@dannyboi472]

My AAT teacher is the worst teacher I have ever had for any subject I have ever taken.

[@TheFinanceStoryteller]

Sorry to hear that! Hope you can find some other resources, like this and other KZbin channels, to help you where needed in your studies.

[@sayyamzahid505]

I live in Karachi Pakistan I like your comments

[@SpiderWick12]

Anyone here from The Pale King? Trying to understand Slyvanshine? No? ...okay...

[@tapiomakinen]

I have often wondered why blockchain technology is considered so disruptive and game changing ledger keeping, while we have this 700+ years old, ingenious method, which could accomplish almost the same with a fraction of fossile fuel consumption (in terms of recording transactions). Am I missing something here?

[@TheFinanceStoryteller]

I agree with you, Tapio, as in: I don't really get it either. 🙂 Maybe it's the volume and complexity of the transactions.

[@MominaRana-]

Where the profit goes?

[@TheFinanceStoryteller]

Have a look at my video on closing entries: kzbin.info/www/bejne/eYnMfH-ql5ynp6s Through the income summary account, the profit gets added to retained earnings on the balance sheet.

[@mohamedashjauaslam4760]

me who has a test tomorrow

[@TheFinanceStoryteller]

Wishing you lots of success with the test, Mohamed!!! Here's the link to my accounting 101 playlist, maybe there are more useful videos in there for you: kzbin.info/www/bejne/mGqWfHWjmL2UpKs

[@anthonygirdler606]

I don't understand why what we owe has to equal what we own. Why can't we own heaps and owe nothing ? Or we could owe trillions and own nothing. Doesn't make sense.

[@TheFinanceStoryteller]

Hello Anthony! It's an agreement/convention on how to record financial transactions, to ensure everybody uses the same logic, and to know what you are looking at when you read financial statements. Similar to every country mandating whether to drive on the left or on the right side of the road, and specifying how wide a train track needs to be, or whether to use the metric system of the imperial system to measure distance and weight. To illustrate how helpful it is, check out this video on balance sheet and income statement relationship: kzbin.info/www/bejne/rYvHkol7jZlkjbM Or for a short story on the history of accounting kzbin.info/www/bejne/fnKvYaZ4mZ6ir8k

[@anthonygirdler606]

@@TheFinanceStoryteller I understand the need for conventions, but conventions generally make some sense. Everyone drives on a certain side so we don't crash. The convention you're explaining is wrong and illogical. We don't always owe what we own. That would be a strange coincidence if all of my assets exactly equal my liabilities. Hopefully one day, I will own far more than I owe....then I can consider retirement. For example....if someone inherits millions at birth and saves it all..... they own a lot, and owe nothing. Your explanation is either wrong or incomplete.

[@TheFinanceStoryteller]

The accounting equation kzbin.info/www/bejne/hYrUnWqPbrOheMk says assets = liabilities plus equity. So from an accounting standpoint, if you inherent millions at birth, then on the assets side you have millions (in cash, jewelry, cars, art, houses) and on the other side the same millions in equity. I have personally never made a balance sheet for my personal wealth, but on a company basis this is the way you would do it.

[@anthonygirdler606]

​@@TheFinanceStoryteller Another ridiculous answer that doesn't address your very first claim. You claim that what you owe equals what you own. Simply not true. And now you introduce a whole new concept to make it add up....equity. It's like saying what you own (assets) equals what you would get if you sold everything(equity). What a bizzare way of saying the value or what you own equals the value of what you own. Am I missing something ? or is this entire convention ludicrous ? This is my interpretation so far. the value of what you have = selling your stuff - what you owe. How is this reduntant simplistic stupidity at the core of a profession ? Are accountants really so stupid they need to concoct something called equity just to make a useless convention add up ?

[@anthonygirdler606]

My point is....this statement of assets = liabilites + equity .....doesn't really mean anything. It doesn't contribute to a business understanding if it is making money. Income and expenses....now that's useful. How much money do I make and how much does it cost me. If that adds up and I can take a wage then the business is worth doing. Please explain the point of assets = liabilities + equity.

[@khalidmahdi1495]

Tomorrow I have an exam and I don’t know any thing please help

[@TheFinanceStoryteller]

Hello Khalid! I hope this video on double entry accounting, as well as related videos in this playlist on debits and credits, and T-accounting, can help you: kzbin.info/www/bejne/n6Cxi6xuZd2rb8U Wishing you all the best in your exam preparations.

[@TalimSahl]

I hope you have get help.

[@JoshuaJoseph-fj4yz]

100 pls

[@TheFinanceStoryteller]

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