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Principles of accounts

by Davie Njobvu

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Principles of accounts

Learn to read, Read to learn
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A beginner-friendly guide to the core principles of accounting. This book breaks down complex concepts like double entry, journals, ledgers, trial balance, and final accounts into clear, practical steps. Packed with examples, worked solutions, and exercises, it’s designed for students, small business owners, and anyone who wants to understand how money really moves in a business. Build confidence in bookkeeping from zero to exam-ready.

Table of contents

  1. 1Principles of accountsThis content contains the foundational principles of Accounting, covering essential concept, Technological,Ethical consideration, The mechanics of business Transaction and the preparation of basics financial statement. It is designed for learner's to grasp the Cole logic and structure of the accounting discipline.
  2. 22. EthicsThese are rules of conduct that guide an accountant's behavior. Accountants handle money and confidential information, so trust is key.
  3. 33. Business Transaction3. Business Transaction
  4. 44. The LedgerDefinition: The main book of Accounts. All transactions from journals/ day books are posted here. It is the final place where we know the balance of each account.
  5. 55. Books of Prime EntryThese are the first books where transactions are recorded from source documents. We call them "day books" or "journals". Why "prime"? Because posting to Ledger happens _after_ recording here. Ledger is "secondary".
  6. 66. Trial BalanceDefinition: A list balances extracted from all ledger accounts with their debit or credit balances on a specific date. We "trial" to check if Dr = Cr. Purpose: 1. Test arithmetical accuracy of ledger posting 2. Basis for preparing Final Accounts 3. Detect errors - but not all errors Rule: Total Debits = Total Credits. If not equal, there’s an error somewhere.
  7. 7Capital and Revenue Receipts and Expenditure
  8. 88. Financial Statements of a Sole Trader
  9. 99. Introduction to Accounting RatiosRatios are tools that turn raw financial numbers into meaning. They show relationships between items in financial statements. Why use ratios 1. Measure performance- Is the business profitable/efficient? 2. Compare - Current year vs last year, or vs competitors 3. Makeicission Should we give credit? Should we invest? Formula pattern: Ratio = One item ÷ Another item. Answer can be %, times, or shillings.

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