Postings to T-accounts, one after another. The core habit of bookkeeping.
1Harbour Print sends Tide Café an invoice for £400. Ignore VAT. Post the sale.
Only some documents change what is owed. Those are the ones that go into the books.
A quotation, a purchase order and a delivery note do not change what is owed. They are kept, but not entered.
Tap the side each account is posted to.
2The bakery sells cakes for £600 to a café. The café will pay next month.
Money that customers owe the business is called trade receivables. It is an asset.
The sale is recorded when it is made, not when the money arrives.
When the customer pays, the money moves from Trade receivables to Bank.
3Post the journal for the tyres Dev took home.
The owner and the business are kept apart in the books. When something passes between them with no money through the business bank, it needs a journal.
Dev takes home tyres that cost the shop £90. He also pays the shop's insurance of £240 from his own private account. Ignore VAT.
4The standing order for one month's rent of £850 leaves Fernhill's bank. Post it.
No document arrives on the day a standing order or a direct debit is paid. The bookkeeper still has to enter each one in the cash book, from a list of regular payments or from the bank statement.
Fernhill's insurer collects £1,380 a year by direct debit, in 12 equal monthly amounts.
5Dev moves £400 from the business account to his own account to pay his rent. Post it.
Money you take out of the business for yourself is called drawings. It is not a business cost.
Money you put into the business from your own pocket is called capital. It is not business income.
6A customer pays £450 for cakes, straight into the bank.
Every transaction is posted twice: once on the debit side of one account, and once on the credit side of another. The two amounts always match. That is double entry.
When money comes in, Bank goes up. Bank is an asset, so it is debited. The other account says where the money came from.