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