As per Double Entry System of book-keeping, all the business transactions recorded in accounts have two aspects – Debit aspect (receiving) and Credit aspect (giving). For example, when a business acquires an asset (receiving) and pays cash (giving) for it. This accounting technique records each transaction as debit and credit, where every debit has a corresponding credit and vice versa.
Feature of Double Entry System of Book -Keeping
The Double entry system of book -keeping comprises of the following features:
- Every business transaction affects two accounts.
- Each transaction has two aspects, i.e., debit and credit.
- Maintains a complete record of all business transactions.
- Helps to check the accuracy of the accounting transactions, by preparation of trial balance
- Helps ascertaining profit earned or loss occurred during a period, by preparation of Profit & Loss Account Helps ascertaining financial position of the concern at the end of each period, by preparation of Balance Sheet.
- Helps timely decision making based on sufficient information.
- Minimizes the possibilities of fraud due to its systematic and scientific recording of business transactions.
