What you'll learn
How every transaction is recorded twice.
Key ideas
- The accounting equation: Assets = Capital + Liabilities.
- Every transaction has a debit and a credit; total debits equal total credits.
- Asset increases are debits; liability increases are credits; accounts are kept in the ledger.
Exam tips
- State the accounting equation confidently.
- Check debits equal credits.
Common mistakes
- Reversing debits and credits.
- Forgetting the accounting equation.