Question

What is Double-entry system of book keeping?

Answer 1

Double entry system records the transactions by understanding them as a DEBIT ITEM or CREDIT ITEM.

A debit entry in one account gives opposite effect in another account by credit entry.

This means that the sum of all Debit accounts must be equal to the sum of Credit accounts.

This method of accounting and book-keeping results in the accurate depiction of financial statements. Thus, it also lowers the rate of errors by detecting them on a timely basis.