A simple definition of accounting
In very simple concepts and basic, we can say that the accounting department of the uptake and loss account and the cost of your company in a number of kilos of account is known as money (see the section on the cost to find out More on Ledger), income and expenses are also known as cash receipts and payments, set up in-and outputs, income and expenditure in relation to the usual terminology of your company, industry and commerce.
The doubleSystem
The basis of good accounting practice of double entry system.
Many non-accountants and accountants who are these people who usually are not aware of accounting and accounting policies to let your accounts outset that I fully understand double entry.
What is a double entry?
In short, a game room for each piece of data, transactions, or enter the information twice (twice) in the general ledger.
If the dataTransaction information or ISA sales invoice, the receipt was issued for a payment or a voucher for payment for a payment made in connection. All these data will also be an objective and, once such a claim.
The result would be that putting the same piece of data twice, once as target and once as a credit, ie credit balances of the accounts, leaving a zero (0), if the total amount of debts and credits in total will be deducted from each other.
For example, if you receive a payment$ 100 for a cash sale, it would be in cash or a bank account and the sales account credit debt, with $ 100. So if you prepare a trial balance, the balance in your cash account is a debt of $ 100 and the account balance would have sales of $ 100 have a credit balance, which balances the budget list.
Why not a double and single voice?
Of course, one could argue that a single-entry system is easier to use, because youonly need to enter data or information once.
But what is important to note is that a double entry system, an automatic check and balance, and thus of any errors and / or omissions have occurred in your books is an alarm.
A system of single entry, it is not possible, these checks and balance.
So I will speak only of the double entry system and ignore the unique system of access.
In the next article I will write to me on the debt andCredit.
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