Main Features of Double-entry System of Book-Keeping:
In the context of double-entry system of book-keeping, the following points should be noted:
1. Double-entry system of book-keeping does not mean that one of the entries of a transaction should be made in one party's book, and the other entry of the transaction should be made in the other party's book. What it really means is that the two entries required for a transaction should be made in each party's book. This is because, a transaction has two aspects, viz., the receiving of some benefit and the giving of some other benefit, for each of the contracting parties.
2. The double-entry system of book-keeping does not mean that the two entries of a transaction should be made in the same account. What it actually means is that the two entries of a transaction should be made in two different accounts. This is because the two aspects, viz., the receiving aspect and the giving aspect, of a transaction affect two different accounts.
3. The double-entry system does not mean that the two entries of a transaction should be made in two different accounts in the same direction or side. What it means is that the two entries of a transaction should be made in two different accounts in opposite directions or sides. One of the entries should be made on the debit side or left-hand side of one account, and the other entry should be made on the credit side or right-hand side of another account. This is because, the two aspects, viz., receiving aspect and the giving aspect, of a transaction are opposite in effect and they affect the two accounts in opposite directions or sides.
4. The double-entry system means that the two entries required for a transaction should be made in two different accounts for equal value (i.e., for the same amount). This is because a transaction involves exchange of equal values or benefits (i.e., the receiving of some benefit of some value and giving of some other benefit of equal value).
5. The double-entry system of book-keeping requires that the two entries of a transaction should be made in two different accounts simultaneously (i.e., at the same time).
In the context of double-entry system of book-keeping, the following points should be noted:
1. Double-entry system of book-keeping does not mean that one of the entries of a transaction should be made in one party's book, and the other entry of the transaction should be made in the other party's book. What it really means is that the two entries required for a transaction should be made in each party's book. This is because, a transaction has two aspects, viz., the receiving of some benefit and the giving of some other benefit, for each of the contracting parties.
2. The double-entry system of book-keeping does not mean that the two entries of a transaction should be made in the same account. What it actually means is that the two entries of a transaction should be made in two different accounts. This is because the two aspects, viz., the receiving aspect and the giving aspect, of a transaction affect two different accounts.
3. The double-entry system does not mean that the two entries of a transaction should be made in two different accounts in the same direction or side. What it means is that the two entries of a transaction should be made in two different accounts in opposite directions or sides. One of the entries should be made on the debit side or left-hand side of one account, and the other entry should be made on the credit side or right-hand side of another account. This is because, the two aspects, viz., receiving aspect and the giving aspect, of a transaction are opposite in effect and they affect the two accounts in opposite directions or sides.
4. The double-entry system means that the two entries required for a transaction should be made in two different accounts for equal value (i.e., for the same amount). This is because a transaction involves exchange of equal values or benefits (i.e., the receiving of some benefit of some value and giving of some other benefit of equal value).
5. The double-entry system of book-keeping requires that the two entries of a transaction should be made in two different accounts simultaneously (i.e., at the same time).
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