What is Double Entry System in Accounting?

The Double Entry System is the foundation of modern accounting. It means that every financial transaction affects at least two accounts in the books—one account is debited, and another is credited. This helps keep the accounting records balanced and accurate.

---

What Does Double Entry Mean?

• For every debit, there is an equal and opposite credit.

• This system ensures the Accounting Equation stays balanced:
  Assets = Liabilities + Owner’s Equity

---

How It Works

For example, if a business buys furniture by paying cash:

• The Furniture account is debited (increase in assets).

• The Cash account is credited (decrease in assets).

This way, the total value in your accounts remains balanced.

---

Why Is Double Entry System Important?

• It helps detect errors since total debits must always equal total credits.

• Provides a complete record of every transaction.

• Makes financial reports like the balance sheet and profit & loss statement accurate and reliable.

---

Key Terms to Remember

• Debit (Dr): Entry on the left side of an account, usually increasing assets or expenses.

• Credit (Cr): Entry on the right side, usually increasing liabilities, equity, or income.

---

Learning the double entry system is essential for anyone starting accounting because it ensures your records are correct and trustworthy.

Why Choose Oeyem?

If you're searching for assignment help India, Oeyem is your one-stop solution for fast, efficient, and quality support. With a dedicated team of professionals, we ensure students receive tailored guidance to excel in their studies.

Get Started Now

Contact Us

If you want any assistance regarding homework help or assignments, please contact us on WhatsApp at +91 9518863521.