Question

1. Please briefly discuss whey we need double-entry accounting?

Answer 1

solution :

double entry accounting :

The double entry system of accounting or bookkeeping means that every business transaction will involve two accounts (or more). For example, when a company borrows money from its bank, the company's Cash account will increase and its liability account Loans Payable will increase.

why we need double entry accounting :

Human errors can cause a misrepresentation of a company's financial position.Double-entry bookkeeping reduces errors because it provides checks and balances. With the advancement of technology, many accounting software programs automatically provide double-entry bookkeeping when a transaction is entered.

importance:

1. Accuracy:

2.Error Reduction

3.Leaves an Audit Trail

4.Financial Statement Preparation