How to Write Accounting Entries in English According to International Standards?

Writing accounting entries in English requires strict adherence to double-entry bookkeeping principles and IFRS/IAS standards, while maintaining precise terminology and standardized formatting. The core lies in accurately reflecting economic substance through debit-credit symmetry, ensuring compliance with both language conventions and accounting rules. Key challenges include avoiding Chinese-style literal translation, correctly using account titles from international charts of accounts, and aligning with materiality principle disclosures.

1. Basic Elements and Structural Logic

Three essential components form English accounting entries:

• Account names: Adopt IAS 1-recommended titles like "Accounts Receivable" instead of literal translations
• Direction markers: Strictly use "Dr" (Debit) and "Cr" (Credit) abbreviations
• Amount formatting: Apply currency symbols left-aligned (e.g., $10,000.00)

Example of basic structure:
Dr: Cash $5,000
Cr: Service Revenue $5,000
Technical specifications:

• Maintain indentation consistency (Cr entries right-indented)
• Multi-line entries align currency symbols vertically
• Use Oxford comma in compound entries

2. Workflow for Cross-border Transactions

Six-step preparation process:

1. Analyze transaction nature: Confirm if it involves FOB/CIF terms or currency hedging
2. Select appropriate accounts: Reference US GAAP Chart of Accounts numbering
3. Determine dual impacts: Apply accounting equation (Assets = Liabilities + Equity)
4. Calculate FX amounts: Use spot rate for transaction-date conversion
5. Draft bilingual notes: Prepare disclosure templates for VAT/GST differences
6. Verify compliance: Cross-check with IFRS 9 financial instruments classification

Special scenarios:

• Consignment sales: Use "Inventory on Consignment" as intermediate account
• Lease accounting: Apply IFRS 16 right-of-use asset recognition

3. Formatting Standards and documentation

Mandatory presentation rules:

• Chronological order: Date formats follow YYYY-MM-DD (2025-03-22)
• Currency clarity: Specify USD/EUR/GBP before amounts
• Multi-currency entries: Add exchange rate footnotes
• Compound entries: Limit to 3 debits/credits maximum per entry

Complete entry example:
Dr: Equipment $12,000
Dr: Input VAT $1,560
Cr: Bank Loan $13,560
Supporting documents:

• Attach purchase invoice (vendor copy)
• Reference loan agreement clause 2.1

4. Common Errors and Quality Control

High-risk mistakes to avoid:

• Misusing "Depreciation" vs "Accumulated Depreciation"
• Confusing "Prepaid Expenses" with "Deferred Charges"
• Incorrectly capitalizing repair costs as assets

Four-eyes verification mechanism:

1. Junior accountant prepares draft
2. Senior reviewer checks account mapping
3. Controller validates tax implications
4. Auditor samples material entries

Automation tools:

• Configure ERP system with multi-language templates
• Enable XBRL tagging for regulatory filings

5. Advanced Applications and Disclosures

Consolidation entries:
Dr: Investment in Subsidiary $500,000
Cr: Non-controlling Interest $50,000
Cr: Business Combination Reserve $450,000
Disclosure requirements:

• Detail goodwill calculation methods in notes
• Disclose elimination entries for intercompany transactions

Derivative accounting:

• Hedge accounting entries require effectiveness testing documentation
• Record fair value changes through OCI (Other Comprehensive Income)

For complex transactions exceeding 5% of total assets, maintain dual-language working papers and conduct quarterly reconciliation with local statutory accounts. Always align English entries with management report narratives to ensure holistic financial communication.