Double Entry System

There are two systems of keeping records i.e. (i) Single Entry System and (ii) Double Entry System. The single entry system appears to be time saving and economical but it is unscientific as under this system some transactions are not recorded at all whereas some other transactions are recorded only partially. On the other hand, the double entry system is based on scientific principles and is, therefore, used by most of the business houses. The system recognizes the fact that every transaction has two aspects and records both aspects of each and every transaction. Under this system in every transaction an account is debited and some other account is credited. The crux of accountancy lies in finding out which of the two accounts are affected by a particular transaction and out of these two accounts, which account is to be debited and which account is to be credited.