explain double entry by solve double column sum please
Answers
Explanation:
The double column cash book (also known as two column cash book) has two money columns on both debit and credit sides – one to record cash transactions and one to record bank transactions. In other words, we can say that if we add a bank column to both sides of a single column cash book, it would become a double column cash book. The cash column is used to record all cash transactions and works as a cash account whereas bank column is used to record all receipts and payments made by checks and works as a bank account. Both the columns are totaled and balanced like a traditional T-account at the end of an appropriate period which is usually one month.
Since a double column cash book provides cash as well as bank balance at the end of a period, some organizations prefer to maintain a double column cash book rather than maintaining two separate ledger accounts for recording cash and bank transactions.
Format
The format/specimen of a double column cash book is given below:
The above format of double column cash book has six columns on both debit and credit sides. The purpose of cash and bank columns has been explained at the start of this article and the purpose of date, description, voucher number (VN) and posting reference (PR) columns has been explained in single column cash book article.
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Important points to remember while making entries in a double column cash book
Recording cash transactions:
All cash receipts are recorded in cash column on the debit side and all cash payments are recorded in cash column on credit side of the double column cash book.
If cash is received from a debtor or customer and is deposited into the bank account on the same date, the entry will be made in the bank column on the debit side, not in the cash column.
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Answer: Double Entry System
Explanation:
Definition of Double-Entry System
The double-entry system of accounting or bookkeeping means that for every business transaction, amounts must be recorded in a minimum of two accounts. The double-entry system also requires that for all transactions, the amounts entered as debits must be equal to the amounts entered as credits.
Example of a Double-Entry System
To illustrate double entry, let's assume that a company borrows $10,000 from its bank. The company's Cash account must be increased by $10,000 and a liability account must be increased by $10,000. To increase an asset, a debit entry is required. To increase a liability, a credit entry is required. Hence, the account Cash will be debited for $10,000 and the liability Loans Payable will be credited for $10,000.
Double Entry Keeps the Accounting Equation in Balance
Double entry also means that the accounting equation (assets = liabilities + owner's equity) will always be in balance. In our example, the accounting equation remained in balance because both assets and liabilities were each increased by $10,000.