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Double Entry System

The document discusses the double entry system of bookkeeping. It states that in this system, every transaction has two equal and opposite effects - a debit and a credit that are recorded simultaneously. For every debit entry, there is a corresponding credit entry of the same amount, so that the total debits equals total credits. Accounts are classified as personal, real or nominal. Examples of double entry transactions are provided to illustrate debiting one account and crediting another for the same amount.

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Bensy Mariam
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561 views6 pages

Double Entry System

The document discusses the double entry system of bookkeeping. It states that in this system, every transaction has two equal and opposite effects - a debit and a credit that are recorded simultaneously. For every debit entry, there is a corresponding credit entry of the same amount, so that the total debits equals total credits. Accounts are classified as personal, real or nominal. Examples of double entry transactions are provided to illustrate debiting one account and crediting another for the same amount.

Uploaded by

Bensy Mariam
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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DOUBLE ENTRY SYSTEM

BY
BENSY MARIAM ZACHARIAH
BMIM
1st SEM (MBA)
INTRODUCTION
• IT IS A SYSTEM OF BOOK-KEEPING WHERE EACH TRANSACTION IS GIVEN
TWO EFFECT,ONE ON THE DEBIT SIDE AND ANOTHER ON THE CREDIT
SIDE.
• IN OTHER WORDS,EVERY TRANSACTION HAS TWO ASPECTS- DEBIT AND
CREDIT.
• BOTH THE ASPECT OF THE TRANSACTION ARE RECORDED
SIMULTANEOUSLY.
• IN THIS SYSTEM OF DOUBLE ENTRY ONE OR MORE ACCOUNTS ARE
DEBITED(Dr) AND FOR THE EQUAL AMOUNT ,ONE OR MORE ACCOUNTS
ARE CREDITED(Cr).
• IN SHORT ,FOR EVERY DEBIT THERE IS A CORRESPONDING CREDIT.
• THE TOTAL OF THE AMOUNT OF DEBIT AND CREDITS WILL ALWAYS BE
EQUAL.
RULE OF DEBIT AND CREDIT
• DEBIT THE RECEIVER & CREDIT THE GIVER.

• DEBIT WHAT COMES IN AND CREDIT WHAT


GOES OUT.

• DEBIT ALL THE EXPENSES AND LOSSES AND


CREDIT ALL GAINS AND PROFITS.
CLASSIFICATION OF ACCOUNTS

• PERSONAL ACCOUNTS
Eg:Babu a/c, Babu &Co. a/c

• IMPERSONAL ACCOUNTS
1. REAL ACCOUNTS
Eg:Cash a/c, Building a/c(Tangible)
Goodwill a/c, Patent a/c (Intangible)
2. NOMINAL ACCOUNTS
Eg: Salaries a/c,Rent a/c, Wages a/c
IILUSTRATION
• PAID CASH Rs 1000/- TO SATHEESH
Satheesh a/c Dr 1000
To Cash a/c 1000

• PURCHASED MACHINERY FOR Rs.20,000/-


Machinery a/c Dr 20,000
To Cash a/c 20,000
• PAID SALARY Rs.3000/-
Salaries a/c Dr 3000
To Cash a/c 3000

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