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    Chapter No. 3 Double Entry Book-Keeping System: Presented by Prachi Mane

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    S1626
    Double entry bookkeeping system records every business transaction with two equal entries - a debit and a credit. This records the two-fold effect of every transaction by debiting one account and crediting another. The system provides complete, accurate records and prevents frauds. It allows preparation of financial statements, knowledge of different accounts and financial status, and quick detection of errors. Some limitations include that it is costly, requires practical knowledge, and errors can occur due to complexity of rules.

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    Chapter No. 3 Double Entry Book-Keeping System: Presented by Prachi Mane

    Uploaded by

    S1626
    213 views15 pages
    Double entry bookkeeping system records every business transaction with two equal entries - a debit and a credit. This records the two-fold effect of every transaction by debiting one account and crediting another. The system provides complete, accurate records and prevents frauds. It allows preparation of financial statements, knowledge of different accounts and financial status, and quick detection of errors. Some limitations include that it is costly, requires practical knowledge, and errors can occur due to complexity of rules.

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    Chap 3- Double Entry System-converted

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    Double entry bookkeeping system records every business transaction with two equal entries - a debit and a credit. This records the two-fold effect of every transaction by debiting one account and crediting another. The system provides complete, accurate records and prevents frauds. It allows preparation of financial statements, knowledge of different accounts and financial status, and quick detection of errors. Some limitations include that it is costly, requires practical knowledge, and errors can occur due to complexity of rules.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    213 views15 pages

    Chapter No. 3 Double Entry Book-Keeping System: Presented by Prachi Mane

    Uploaded by

    S1626
    Double entry bookkeeping system records every business transaction with two equal entries - a debit and a credit. This records the two-fold effect of every transaction by debiting one account and crediting another. The system provides complete, accurate records and prevents frauds. It allows preparation of financial statements, knowledge of different accounts and financial status, and quick detection of errors. Some limitations include that it is costly, requires practical knowledge, and errors can occur due to complexity of rules.

    Copyright:

    © All Rights Reserved
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    Download as pdf or txt
    of 15

    CHAPTER NO.

    DOUBLE ENTRY
    BOOK-KEEPING SYSTEM
    🡪Presented by Prachi Mane
    ❖MEANING OF DOUBLE ENTRY SYSTEM
    • Double Entry System of Book Keeping denotes that every business transaction has two fold effect.
    • According to J.R. Batliboi, “Every business transaction has a two-fold effect and that it affects
    two accounts in opposite directions and if a complete record was to be made of each such
    transaction , it would be necessary to debit one account and credit another account.” It is this
    recoding of the two fold effect of every transaction that has given rise to the term “Double Entry
    System”.
    • “The Double entry system seeks to record every transaction in money or money’s worth in its double
    aspect- the receipt of benefit by one account and the surrender of a like benefit by another account
    the former entry being to the debit of the account receiving and the latter to the credit of the account
    surrendering.”- William Pickles
    SELLS LAPTOP

    SELMON
    RANBIR[SELLER] BHAI[BUYER]

    ✔GOODS GOING OUT SELL ✔GOODS COMING IN PURCHASE


    ✔CASH COMING IN RECIEPT ✔CASH GOING OUT PAYMENT
    •FEATURES OF DOUBLE ENTRY BOOK KEEPING SYSTEM
    •AFFECTS TWO ACCOUNTS

    •DEBIT
    •CREDIT
    •CONCEPTS/
    •CONVENTIONS

    •TRIAL BALANCE
    •FINANCIAL STATEMENTS
    PRINCIPLES OF
    EachDOUBLE
    debit ENTRY BOOKEvery
    KEEPING SYSTEM
    Each
    must have Only business transaction is
    Two aspects correspondin monetary transactions recorded in
    g Credit and transactions have two BOA on basis
    vice a versa parties of set rules
    TO EMPLOYEES:
    • Self-confidence
    TO TRADERS: • Division of work
    • Complete Record
    • Accuracy
    • Prevents Frauds
    • Quick Detection of
    Errors TO GOVERNMENT:
    ADVANTAGES
    • Knowledge about • Knowledge of Business
    OF DOUBLE
    Different accounts condition
    ENTRY
    • Check on Expenses • Help in taxation
    BOOK-KEEPING
    • Comparison of • Issue of licenses
    SYSTEM
    Performance • Policy about help
    • Preparation of Final
    Statements
    • Financial Status
    • Legal Approval
    • Decision Making TO OTHER PARTIES:
    • Decision Making
    • Progress of Business
    • Simple
    • Objective Oriented
    FEATURES OF • Scientific
    AN IDEAL • Elasticity
    SYSTEM OF • Economical
    ACCOUNTING • Informative
    • Government Approval
    • Audit
    DOUBLE ENTRY V/S SINGLE ENTRY
    LIMITATIONS OF DOUBLE ENTRY
    BOOK-KEEPING SYSTEM

    •Costly
    •Need Practical Knowledge
    •Errors
    •Complexity of Rules

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