User talk:Satyapranathy

DOUBLE ENTRY SYSTEM: Double entry system of book-keeping has emerged in the process of evolution of various accounting techniques.It is the scientific system of accounting.According to it ,every transaction has two-fold aspects-debit and credit and both the aspects are to be recorded in the books of accounting.For example,on purchase of furniture either the cash balance will be reduced or a liability to the supplier will arise.We may define the Double Entry System as the system which recognizes and records both the aspects of transactions. TRANSACTIONS: For recording transaction it is very important that they are supprted by a substantial documents like purchasing invoices,bills,pay-slips,cash-memos,passbook e.t.c.., To analyse the dual aspect of each transaction,two approaches can be followed: →Accounting Equation Approach. →Traditional Approach. ACCOUNTING EQUATION APPROACH: The relationship of assets with that of liabilities and owner's equity in the form of equation is known as 'Accounting Equation Approach'. TRADITIONAL APPROACH: Transactions in the journal are recorded on the basis of the rules of debit and credit only. →PERSONAL ACCOUNTS. Debit the receiver. Credit the giver. →REAL ACCOUNT. Debit what comes in. Credit what goes out.

→NOMINAL ACCOUNT. Debit all expenses and loses. Credit all income and gains.

THE PROCESS OF RECORDING TRANSACTIONS IN JOURNAL IS TERMED AS JOURNALIZING THE ENTRIES.