Question

Explain double entry in accounting and relate it to any accounting concept.

Answer 1

In accounting, double entry means every financial transaction has opposite and equal impacts in minimum of two different accounts, resulting in a credit to one or more accounts and a debit to one or more accounts. Moreover all the transactions recorded as credits should equal to the amounts entered as debits. The double entry in accounting must satisfy the dual aspect concept in accounting which states that: Assets = Liabilities + Capital.

The implication of double entry in accounting in the dual aspect concept is that all financial transaction will have an equal impact on assets as well as liabilities in an approach that total assets will be equal to total liabilities; and the concept helps in the detection of an error