Question

Principles of Double Entry System

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Answer 1

Answer:

The basic principle of double entry bookkeeping is that there are always two entries for every transaction.

One entry is known as a credit entry and the other a debit entry.

The entries are often displayed in ‘T’ accounts

Explanation:

You should understand that if the double entry as been carried out properly, then the sum of the debit entries should always equal the sum of the credit entries. This should be regularly checked by compiling a trial balance, which is simply all the accounts listed in debit and credit columns and the lists added up. The totals should always agree

Answer 2

Answer:

1. Each transaction affects two accounts. Eg- if furniture is purchased in the business,then furniture is increased and cash is decreased.
2. From The two affected accounts- one account is recieving a benifit and the other is yielding a benifit.
3. The person or the account recieving a benefit is debited and the person or the account who gives something to the business is credited.
4. Double Entry System records the transaction in money or money's worth in its double expect.
5. Every debit has a credit and every credit has a debit.