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    Double Entry System AccountingCoach

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    narendra
    The double entry system of accounting requires that every business transaction be recorded in a minimum of two accounts, with equal debits and credits. For example, if a company borrows $10,000 from a bank, the Cash account would be debited for $10,000 and the Loans Payable account would be credited for $10,000. This double entry bookkeeping ensures the accounting equation of assets equaling liabilities plus owner's equity remains balanced.

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    Double Entry System AccountingCoach

    Uploaded by

    narendra
    51 views1 page
    The double entry system of accounting requires that every business transaction be recorded in a minimum of two accounts, with equal debits and credits. For example, if a company borrows $10,000 from a bank, the Cash account would be debited for $10,000 and the Loans Payable account would be credited for $10,000. This double entry bookkeeping ensures the accounting equation of assets equaling liabilities plus owner's equity remains balanced.

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    The double entry system of accounting requires that every business transaction be recorded in a minimum of two accounts, with equal debits and credits. For example, if a company borrows $10,000 from a bank, the Cash account would be debited for $10,000 and the Loans Payable account would be credited for $10,000. This double entry bookkeeping ensures the accounting equation of assets equaling liabilities plus owner's equity remains balanced.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    51 views1 page

    Double Entry System AccountingCoach

    Uploaded by

    narendra
    The double entry system of accounting requires that every business transaction be recorded in a minimum of two accounts, with equal debits and credits. For example, if a company borrows $10,000 from a bank, the Cash account would be debited for $10,000 and the Loans Payable account would be credited for $10,000. This double entry bookkeeping ensures the accounting equation of assets equaling liabilities plus owner's equity remains balanced.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 1

    What is the double entry system? | Accountin... about:reader?url=https://www.accountingcoac...

    accountingcoach.com

    What is the double entry system? |


    AccountingCoach

    1-2 minutes

    Definition of Double Entry System


    The double entry system of accounting or bookkeeping means
    that for every business transaction, amounts must be recorded
    in a minimum of two accounts. The double entry system also
    requires that for all transactions, the amounts entered as
    debits must be equal to the amounts entered as credits.

    Example of a Double Entry System


    To illustrate double entry, let's assume that a company borrows
    $10,000 from its bank. The company's Cash account must be
    increased by $10,000 and a liability account must be increased
    by $10,000. To increase an asset, a debit entry is required. To
    increase a liability, a credit entry is required. Hence, the
    account Cash will be debited for $10,000 and the liability Loans
    Payable will be credited for $10,000.

    Double Entry Keeps the Accounting Equation in Balance


    Double entry also means that the accounting equation (assets
    = liabilities + owner's equity) will always be in balance. In our
    example, the accounting equation remained in balance
    because both assets and liabilities were each increased by
    $10,000.

    1 of 1 04/02/19, 9:25 pm

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