what is fundamental accounting models? discuss two accounting equalities must be maintained in transaction analysis
Answers
Answer:
The fundamental accounting equation, also called the balance sheet equation, represents the relationship between the assets, liabilities, and owner's equity of a person or business. It is the foundation for the double-entry bookkeeping system. For each transaction, the total debits equal the total credits.
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.
Explanation:
The Golden Rules are:
Personal Account - Debit the Receiver & Credit the Giver.
Impersonal Real Account - Debit what Comes In & Credit what Goes out.
Impersonal Nominal Account - Debit all Expenses and Losses & Credit all Income and Gains.