Double Entry System

Answer

The double entry system is a system of accounting under which every transaction is recorded in at least two accounts, once as a debit and once as an equal credit. It records both aspects of a transact…

Answer

It is complete because every business transaction is recorded from both sides: the receiving aspect and the giving aspect. This means no transaction is recorded only partly. For example, when cash com…

Answer

Every business transaction has two aspects: the receiving aspect and the giving aspect. The account that receives the benefit is debited, and the account that gives the benefit is credited, according …

Answer

A trial balance can be prepared because total debits must equal total credits in the double entry system. This equality helps check arithmetical accuracy of the accounts.

Answer

No. Certain errors may not be detected even under the double entry system. Errors of principle, errors of omission, and compensating errors may remain undetected by a trial balance.

Answer

A Personal Account is a traditional account type for persons, firms, companies, and institutions. Its rule is: Debit the Receiver and Credit the Giver. Personal accounts have three subtypes: natural, …

Answer

Personal accounts have three subtypes: natural personal accounts, artificial personal accounts, and representative personal accounts. Natural accounts are for human beings, artificial accounts are for…

Answer

A Real Account is a traditional account type for tangible and intangible assets. Its rule is: Debit what comes in and Credit what goes out. Real accounts have two subtypes: tangible and intangible.