In this article, we will learn **how to create double-entry bookkeeping in Excel**. Bookkeeping is the process of recording financial transactions. In double-entry bookkeeping, we need to insert two-sided accounting entries of the financial transaction. So, without delay, let’s explain the steps of creating double-entry bookkeeping in Excel.

**Table of Contents**hide

## Download Practice Workbook

To practice by yourself, download the following workbook.

## What Is Double Entry Bookkeeping in Excel?

Bookkeeping is the process of recording financial transactions. There are **2 **types of methods available for bookkeeping. One is **single**–**entry** bookkeeping and other is the **double**–**entry** bookkeeping. In double-entry bookkeeping, we need to insert two-sided accounting entries of the financial transaction. Therefore, we must include all relevant details on the origin and destination of the money.

## Step-by-Step Procedures to Create Double Entry Bookkeeping in Excel

To explain the methods, we will use a dataset of the initial balance sheet of a company. It contains a dataset related to the starting condition of the production business. We have organized the data in **Particulars**, **Credit**/**Debit**, **Debit**, and **Credit **columns. To learn the procedure, let’s go through the steps.

### STEP 1: Enter Documents for Double Entry Bookkeeping

- Firstly, we have selected the following dataset.
- You can see the
**Particulars**,**Credit**/**Debit**,**Debit**and**Credit Amounts**inside the dataset. - Now, at present, we will calculate the total amount of
**Credit**and**Debit**in this dataset.

- In the next step, we will calculate the total
**Debit**amount. - So, write down the following formula:

`=SUM(D5:D12)`

- Now, press
**Enter**to have the debit summation.

- Similarly, we will find out the summation of the
**Credit amount.** - Therefore, write down the following formula:

`=SUM(E5:E12)`

- Press
**Enter**to calculate the**Credit**summation.

** **

**Read More: ****How to Do Bookkeeping for Small Business in Excel (Step-by-Step)**

### STEP 2: Make Journal Entries in Excel

- In the following step, we need to enlist the financial activities for a certain period.
- In our dataset, we have enlisted the financial activities of a company in the month of
**July 2022**.

- Now, we need to rearrange the financial activities into a balance sheet.
- We have reorganized this information into a similar balance sheet as the previous dataset.

- In this step, we will make entries to create
**Journal**. - You need to consider every financial statement into account considering both the initial balance sheet and the newly created balance sheet.
- For this reason, we will calculate every financial statement with these two sheets.
- So, insert the following formula to find the
**Debit**of the**Machine**.

`=Dataset!D5+Entries!E17`

- After inserting the formula, you must have to press
**Enter**.

Here, **Dataset** is our first initial balance sheet name and **Entries **is our newly formed balance sheet. **Machine **entry is available in the **Debit** column of both sheets. In the **Dataset **balance sheet, it is presented in the **D5 **cell and in the **Entries **balance sheet, it is presented in the **E15 **cell. So, we have added the **Debit** value and found out our new balance.

- Now, we will insert the following formula in the
**Debit**column of the**Inventory**item:

`=Dataset!D6`

- After inserting, press
**Enter**.

Here, in our newly formed **Entries **named dataset, **Inventory **is not presented, we have taken the entry of the **Dataset **sheet. It is presented in the **D6** cell.

- Similarly, we have made the entries of each financial statement.
- Finally, we can see the
**Journal**of the financial statement and can analyze the condition of the company. - Now, we will check the correctness of our calculations.
- For checking, we will calculate the summation of
**Debit**and**Credit.**

- Now, write the following formula in the
**Debit**column to calculate the summation:

`=SUM(D5:D16)`

- After writing the formula, hit
**Enter.**

- Now, write the following formula in the
**Debit**column to calculate the summation:

`=SUM(E5:E16)`

- Hit
**Enter**. - Finally, we can tell that we have done our work accurately as
**Debit**equals**Credit**.

**Read More: ****How to Make Trial Balance in Excel (with Easy Steps)**

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### STEP 3: Create Ledger and Trial Balance from Journal Entries

- Now, in this step, we will create
**Ledger**and**Trial Balance**from our previous**Journal Entries.** - Firstly, you have to create a layout for the
**ledger**with the necessary cell allocation for items. - We need to insert some important items like
**date**,**activity description**,**client**,**account type**,**debit**, and**credit**amount. - After that, you also have to assign two cells to insert the
**start**and**end**dates of the period.

- In the next step, you will create a new worksheet to create
**trial balance**data linked with the**ledger balance sheet**. - Here, we created
**3**columns for**Accounts**,**Debit**, and**Credit**.

- Now, after creating the layout, we will insert the possible
**account**names in the**Accounts**column of**Trial Balance**. - We will use these
**account**names in the ledger sheet.

- Now, insert the
**end**day and**start**day of the**Ledger Balance Sheet.** - Here, we are doing our task for the month of
**July 2022.** - That’s why we will insert
**1st July**and**31st July**as our start and end day.

- After that, we will create a
**drop-down**menu for the cells of the column**Account Type**. - For creating the drop-down menu, select all the cells of the
**Account Type**column. - Then, go to the
**Data**tab in the top ribbon. - After that, click on the drop-down menu of
**Data Validation**from the**Data Tools**group**.** - Now, a wizard will come out and select
**Data Validation**from there.

- In the
**Data Validation**window, select**List**in the**Allow**criteria option. - After that, select cells of range
**B5:B16**in the “**Trial Balance**” worksheet in the Source box. - Before doing this step, we need to rename the sheet of
**Ledger Balance Sheet**as**Trial Balance.** - Finally, press the
**OK**button. - As a result, we can now select any of the
**accounts**from the list of**available accounts**by clicking on the drop–down in the**Account Type**column.

- In the following step, move to the
**Trial Balance**worksheet and insert the following formula in cell**C5**to calculate the total debit amount for each account.

`=SUMIF(Ledger!$E$7:$E$26,'Trial Balance'!B5,Ledger!$F$7:$F$26)`

- Then, insert the following formula in cell
**D5**to calculate the**total Credit amount**for each account.

`=SUMIF(Ledger!$E$7:$E$26,'Trial Balance'!B5,Ledger!$G$7:$G$26)`

- Now, drag the
**Fill Handle**icon to paste the used formula respectively to the other cells of the column.

- So, we have successfully inserted the formula in the
**Trial Balance**sheet to calculate**Trial Balance**from the**Ledger.**

** **

- In the following step, return to the
**Ledger Balance Sheet**and make**Ledger**from the**Journal.** - We have kept input from the initial dataset of the
**Journal**against the date of**1st July 2022**.

- After that, we have made the
**Ledger**information from the newly inserted**Journal**entries.

- Now, insert the following formula in the
**F5**column to sum the**Debit**total:

`=SUM(F7:F26)`

- After
**inserting**the formula, press**Enter.**

** **

- After that, insert the following formula in the
**G5**column, to sum up the**Debit**total.

`=SUM(G7:G26)`

** **

- After
**inserting**the data in**Ledger**, automatically update the value in**Trial Balance.** - Finally, we have successfully formed
**Trial Balance**from**Ledger**and also**Ledger**from**Journal.**

**Read More: ****How to Create Money Management Excel Sheet for Trading**

### STEP 4: Prepare Financial Statements from Trial Balance

- In the following step, we will prepare
**Financial Statement**from the**Trial Balance.** - Firstly, we will
**insert****Asset**items and their values. **Assets**are the main resources owned by the company.- Accordingly, we will insert the items from the
**Ledger.**

- After that, we will summarize the
**Assets.** - In
**C15**cell, write the following formula to calculate**Total Assets:**

`=SUM(C9:C14)`

** **

- In the following step, we will
**insert Liabilities**and**Owner’s Equity.** **Liabilities**are things that the company owes to a person or another company, like cash, loans, etc. and we will insert accordingly.**Owner’s Equity**represents the value for a company’s shareholders after all the company’s assets have been sold off and all company liabilities have been paid off.- Here, in the following figure, we have inserted
**Liabilities**and**Owner’s Equity**from the**Ledger.**

** **

- Now, we will sum up the
**Liabilities**by using the following formula in the**C26**cell:

`=SUM(C20:C25)`

- Hit
**Enter**to observe the sum.

- In the next step, we will add
**Liabilities**and**Owner’s Equity.** - So, we need to add
**Total Liabilities**and**Owner’s Equity**data. - So, type the following formula in the
**C29**cell:

`=C26+C28`

### Final Output

- Finally, we have successfully created
**Financial Statement**using double-entry bookkeeping in Excel.

## Conclusion

In this article, we have demonstrated step-by-step procedures to** create double-entry bookkeeping in Excel**. There is a practice workbook at the beginning of the article. Go ahead and give it a try. To read similar articles, check out the **ExcelDemy **website. Last but not least, please use the **comment section** below to post any questions or make any suggestions you might have.

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