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Answer the following questions with full explanation :
(1) What is Double Entry System? What are it's characteristics ?
(2) Give two advantages of Double Entry System.
(3) What is meant by Nominal , Real and Personal account ?
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(1) Double entry bookkeeping, in accounting, is a system of bookkeeping so named because every entry to an account requires a corresponding and opposite entry to a different account. The double entry has two equal and corresponding sides known as debit and credit. The left-hand side is debit and right-hand side is credit. Following are the characteristics:―
1. Every business transaction affects two or more accounts.
2. Every account is divided in two parts.
3. Division of amount column as debit and credit.
4. Dual aspect of every transaction.
5. Based upon accounting concepts and conventions.
6. Preparing trial balance.
7. Preparation of final accounts.
_______________________________
(2) The two advantages of Double Entry System are as follows:―
1. Under this method both the aspects of each and every transaction are recorded. So it is possible to keep complete account.
2. Under this system mistakes and deflections can be detected - this exerts a moral pressure on the accountant and his staff.
_______________________________
(3) Nominal accounts are the temporary accounts, such as the income statement accounts. In other words, nominal accounts are the accounts that report revenues, expenses, gains, and losses. This means that their account balances are transferred to a permanent account.
A real account is a general ledger account that does not close at the end of the accounting year. In other words, the balances in the real accounts are carried over to become the beginning balances of the next accounting period. Generally, the real accounts are the balance sheet accounts.
A personal account is an account for use by an individual for that person's own needs. It is a relative term to differentiate them from those accounts for business or corporate use.
_______________________________
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Here are your answers
(1) Double entry bookkeeping, in accounting, is a system of bookkeeping so named because every entry to an account requires a corresponding and opposite entry to a different account. The double entry has two equal and corresponding sides known as debit and credit. The left-hand side is debit and right-hand side is credit. Following are the characteristics:―
1. Every business transaction affects two or more accounts.
2. Every account is divided in two parts.
3. Division of amount column as debit and credit.
4. Dual aspect of every transaction.
5. Based upon accounting concepts and conventions.
6. Preparing trial balance.
7. Preparation of final accounts.
_______________________________
(2) The two advantages of Double Entry System are as follows:―
1. Under this method both the aspects of each and every transaction are recorded. So it is possible to keep complete account.
2. Under this system mistakes and deflections can be detected - this exerts a moral pressure on the accountant and his staff.
_______________________________
(3) Nominal accounts are the temporary accounts, such as the income statement accounts. In other words, nominal accounts are the accounts that report revenues, expenses, gains, and losses. This means that their account balances are transferred to a permanent account.
A real account is a general ledger account that does not close at the end of the accounting year. In other words, the balances in the real accounts are carried over to become the beginning balances of the next accounting period. Generally, the real accounts are the balance sheet accounts.
A personal account is an account for use by an individual for that person's own needs. It is a relative term to differentiate them from those accounts for business or corporate use.
_______________________________
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☝☝Plz mark as brainliest☝☝
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(a) In Double entry system equal to debits and credits are made in the accounts for the transaction was the total debates always equal to the total credits and the accounting equation will always in balance .
characteristics of double entry system are stated below, two parties :
every transaction involve two parties is debits and credit. Exchange of equal amount of money of a transaction the party is give the equal amount that the party receive .
(b) the advantage of double entry system are :
◆Scientific System : Double entry system is only the scientific system of the recording bussiness transaction as the other system of book keeping.
◆Complete record of transaction : Under a system both side of transaction are recorded. it is a complete record as result in depicting current income or loss.
Hope this helps you✌️✌️
characteristics of double entry system are stated below, two parties :
every transaction involve two parties is debits and credit. Exchange of equal amount of money of a transaction the party is give the equal amount that the party receive .
(b) the advantage of double entry system are :
◆Scientific System : Double entry system is only the scientific system of the recording bussiness transaction as the other system of book keeping.
◆Complete record of transaction : Under a system both side of transaction are recorded. it is a complete record as result in depicting current income or loss.
Hope this helps you✌️✌️
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