State the principles of double entry system of bookkeeping.

1.	State the principles of double entry system of bookkeeping.
Answer» Following are the principles of double entry system: 1. In every business transaction, there are two aspects. 2. The two aspects involved are the benefit or value receiving aspect and benefit or value giving aspect. 3. These two aspects involve minimum two accounts; at least one debit and at least one credit. 4. For every debit, there is a corresponding and equivalent credit. If one account is debited the other account must be credited.

Answer»

Following are the principles of double entry system:

1. In every business transaction, there are two aspects.

2. The two aspects involved are the benefit or value receiving aspect and benefit or value giving aspect.

3. These two aspects involve minimum two accounts; at least one debit and at least one credit.

4. For every debit, there is a corresponding and equivalent credit. If one account is debited the other account must be credited.

Discussion