Double entry Book-keeping
What do you understand by the word double entry ‘Bookkeeping’? And also describe its policies?
Expert
Double entry bookkeeping follows the principle according to that every debit has an equivalent credit; therefore sum of all debits is always equivalent to the sum of all credits. In this method, one account is debited and at the same time any other account is credited through the similar amount. Following are the rules for various accounts that are illustrated below:
- For Personal Accounts: Credit the giver and Debit the receiver.- For Real Account: Credit what goes out and Debit what comes in.- For Nominal Account: Credit all the incomes and Debit all the expenses.
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