Double-entry system – meaning

Double-entry system - meaning
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The double-entry system of bookkeeping refers to a system of accounting under which both of the aspects (i.e. debit and credit) of every transaction are recorded in the accounts involved. For each transaction, this means that a bookkeeping entry will have to be made to show an increase or decrease of the other item

Every debit has an equal amount of credit. So the total of all debits must be equal to the total of all credits. A twofold aspect of a transaction is called a dual aspect or duality of transaction

Example: Ms. Gracious sold goods for cash TZS 1000 to Ms. Joan. In this case, the dual aspect of this transaction for Ms. Gracious and Ms. Joan are as follows:

Dual aspects for Ms. Gracious

1. Receipt of cash For TZS 1000

2. Foregone of goods of TZS 1000

Dual aspects for Ms. Joan

1. Payment of cash TZS 1000

2. Receipt of goods of TZS 1000

Author: amidu edson

I am certified accountant with more than 5 years of teaching experience. Currently am teaching auditing and assurance, management accounting and financial accounting for student preparing for professional exams such as ACCA and CPA.