entry system

Lesson
Questions
 What is the double
entry system?
The double entry system or double entry
accounting is the most used method or system of
recording accounting operations in accounting.
The entry that involves the two items (debit and
credit) is called an accounting entry. This system
resembles a balanced scale, since, within an
accounting entry, the sum of the concepts of
debit and credit must always be equal.
 What is the double
entry system?
Given modern data processing
systems, the convenience of
separating the active, passive and
result concepts into separate columns
is maintained, to convert the journal
into a computer-quality support.
What does it consist of?
In the double entry, the positive value corresponds to
a debit (what one has, owes, asset) and the negative
value corresponds to a credit (what is given,
credited, equity/liability). A value must be recorded
in at least two accounts, but it may be the case that
more than two accounts are required. If a value is
recorded in two accounts, it is a simple or simple
entry because the records are recorded in one
account that is debited and another that is credited.
What does it consist of?
If more than two accounts are involved (in
the event that merchandise was purchased
and paid in cash and credit), these are
compound or double entries. In both cases,
the balance between what goes out and
what comes in must be guaranteed so that
balance is maintained in the accounts.
How it helps in the accounting
process?
The world of accounting is a complex and diverse
field, covering a wide range of fundamental
concepts and principles, which is why taking
online accounting classes will bring you
numerous benefits. One of the most important
principles in accounting is the double entry
principle, which states that each accounting
transaction must have an effect on at least two
accounts. This principle is based on the idea that
all transactions have a double impact, both on
the assets and liabilities of an entity.
How it helps in the accounting
process?
The double entry principle is crucial to
ensure the integrity and accuracy of
accounting records. By requiring each
transaction to have an effect on at least
two accounts, important details are
prevented from being omitted or
overlooked. This helps ensure that
financial statements accurately reflect a
company's financial condition.
Examples
 Examples:
1
Cash Sale of Goods

Let's say a business makes a cash sale of goods

for $1,000.

Journal Entry: Debit Cash (to increase the asset

account for cash received): $1,000

Credit Sales Revenue (to increase the revenue

account): $1,000
 Examples:
2
Purchase of Inventory on Credit

Suppose a business purchases inventory on credit for $500.

Journal Entry:
Debit Inventory (to increase the asset
account for inventory): $500

Credit Accounts Payable (to increase the

liability account for the amount owed): $500
 Examples:
3
An example of double-entry
accounting would be if a business
took out a $10,000 loan and the loan
was recorded in both the debit
account and the credit account. The
cash (asset) account would be debited
by $10,000 and the debt (liability)
account is credited by $10,000.
Thanks for
your time!
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