The Double Entry Bookkeeping system is scientific, perfect, and a complete method of recording business information in the books of accounts.
Generally, in every business transaction, we find two accounts, out of which one account is given debit effect and another account is given credit effect.
In other words, in this system for every debit, there is a corresponding credit and all debits are equal to all credits. If anything comes into the business, an account of that item is to be debited and if anything goes out from business, an account of that item is to be credited in the books of account.
Take an example here…
Assume, Patrik bought goods from Michael worth Rs. 5,000 by paying cash. Here, Patrik gets goods of Rs. 5,000 and parts with cash of Rs. 5,000.
In the books of Patrik, Goods A/c. will be given debit effect to extent of Rs. 5.000 and Cash A/c. will be given credit effect to extent of Rs. 5,000.
Thus, every business transaction is split up into two parts or two aspects, i.e. debit aspect and credit aspect.
The debit effect is posted to the debit side of Ledger A/c. and the credit effect is recorded on the credit side of the Ledger A/c. It means every business-related transactions are recorded in two different accounts at two different locations.
In this manner, in the double-entry bookkeeping system, completed business transactions are recorded in journals as well as in ledgers.
At the end of the accounting year, all ledger accounts are closed and balanced. The balance shown by each ledger account is then recorded on a separate sheet in order of debit and credit. This is known as trial balance. When this process is over, the debit column and credit column of the trial balance are totaled. The debit side total agrees or equals with the credit side total. It means every debit is given equivalent credit under the double-entry bookkeeping system.
This is the correct and scientific method of recording business transactions in the books of accounts. This double-entry bookkeeping system of accounting is almost universally applied in every organization.
Thus, the double-entry bookkeeping system seeks to record every business transaction in money or money’s worth in its double aspects viz. debit and credit.
Advantages of Double-Entry Book Keeping System
- By recording double aspects of each transaction in the books of accounts, it ensures an arithmetical accuracy of the account.
- This system is helpful to detect, prevent, and reduce fraud.
- If at all any mistake occurs, it can be detected and rectified.
- The exact amount due to us from customers/debtors and other parties, and the exact amount payable to creditors/suppliers by us can be known easily from the records maintained as per this system.
- This accounting system keeps complete, accurate, and perfect records of business transactions.
- This accounting system is suitable for all types of business organizations i.e. small scale, medium scale, and large scale, public and private business organization, etc.
- This accounting system is helpful to prepare trial balances and final accounts of the business at the end of the accounting year.
- With the help of this system income statements of the current year can be compared with the income statements of previous years and on the basis of that comparison, a business gets information about the variations in income and expenses. To control expenses, a businessman can adopt different measures.
Disadvantages of Double-Entry Book Keeping System
- If the amount of a transaction is wrongly recorded in the Journal, it is difficult to find out this mistake.
- It is very difficult to locate any business transaction which is not recorded in the main books of account.
- Posting under wrong account heads but on the right side, such errors may not be detected by this system.
- Compensating errors and errors of omission can not be detected by this accounting system.
- This system is more lengthy, elaborate, and complex in nature.
Mfumo wa Uhifadhi wa Mwongozo wa Mbili ni kisayansi, kamilifu, na njia kamili ya kurekodi habari za biashara katika vitabu vya akaunti. Kwa kawaida, katika kila shughuli ya biashara, tunapata akaunti mbili, ambazo akaunti moja hupewa athari ya debit na akaunti nyingine hupewa athari ya mkopo. Kwa maneno mengine, katika mfumo huu kwa kila debit, kuna mikopo inayolingana na mikopo yote ni sawa na mikopo yote. Ikiwa kitu chochote kinaingia katika biashara, akaunti ya bidhaa hiyo inapaswa kupunguzwa, na ikiwa kitu chochote kinaondoka katika biashara, akaunti ya bidhaa hiyo inapaswa kuandikishwa katika vitabu vya akaunti. Chukua mfano hapa... Tuseme, Patrik alinunua bidhaa kutoka kwa Michael yenye thamani ya Rs. 5,000 kwa kulipa kwa fedha taslimu. Hapa, Patrik anapata bidhaa za Rs. Vipande vya vifaa vya kusafisha na vifaa vya kusafisha vya Rs. Elfu tano. Katika vitabu vya Patrik, Bidhaa A/c. itapewa athari ya malipo kwa kiasi cha Rs. Cash A.C. itapewa athari ya mkopo kwa kiasi cha Rs. Elfu tano. Kwa hivyo, kila shughuli ya biashara imegawanywa katika sehemu mbili au mambo mawili, yaani Debit na Credit Aspects Debit athari ni posted kwa upande wa debiti ya Ledger A / c. Kwa mfano, kwa mfano, uhasibu wa mkopo unaorekodiwa katika sehemu ya mkopo ya Ledger A. Hii inamaanisha kwamba shughuli zote za biashara zimeandikwa katika akaunti mbili tofauti katika maeneo mawili tofauti. Kwa njia hii, katika mfumo wa uhifadhi wa vitabu vya mara mbili, shughuli za biashara zilizokamilika zimeandikwa katika majarida na pia katika vitabu vya vitabu. Mwishoni mwa mwaka wa uhasibu, akaunti zote za ledger zimefungwa na kulinganishwa. Msalaba ulioonyeshwa na kila akaunti ya ledger kisha huandikwa kwenye karatasi tofauti kwa utaratibu wa deni na mkopo. Hii inajulikana kama usawa wa majaribio. Wakati mchakato huu ni juu, debiti safu na mkondo wa mikopo ya usawa wa majaribio ni jumla. Jumla ya upande wa deni inakubaliana au ni sawa na jumla ya upande wa mkopo. Inamaanisha kila debit ni kupewa mikopo sawa chini ya mfumo wa uhifadhi wa vitabu mara mbili. Hii ni njia sahihi na ya kisayansi ya kurekodi shughuli za biashara katika vitabu vya akaunti. Mfumo huu wa uhasibu wa maandishi mawili unatumika karibu kila mahali katika kila shirika. Hivyo, mfumo wa uhasibu wa kuingia mara mbili unatafuta kurekodi kila shughuli ya biashara katika pesa au thamani ya pesa katika mambo yake mawili yaani. Debit na mikopo. Faida za mfumo wa kuweka vitabu vya kuingia mara mbili - Kwa kurekodi pande mbili za kila shughuli katika vitabu vya akaunti, inahakikisha usahihi wa hesabu. - Mfumo huu ni muhimu kugundua, kuzuia, na kupunguza udanganyifu. - Kama hata makosa yoyote hutokea, inaweza kugunduliwa na kurekebishwa. - Kiasi halisi kinachostahili kwetu kutoka kwa wateja, madeni na pande nyingine, na kiasi halisi kinachostahili kulipwa kwa wakopeshaji au wauzaji na sisi, inaweza kujulikana kwa urahisi kutoka kwa rekodi zilizohifadhiwa kulingana na mfumo huu. - Mfumo huu wa uhasibu huhifadhi rekodi kamili, sahihi, na kamilifu za shughuli za kibiashara. - Mfumo huu wa uhasibu ni sahihi kwa aina zote za mashirika ya biashara yaani Mfano: Mfano wa biashara ndogo, ndogo, kati, kubwa, ya umma na binafsi, na biashara ya umma. - Mfumo huu wa uhasibu ni muhimu kwa ajili ya kuandaa usawa wa majaribio na akaunti ya mwisho ya biashara mwishoni mwa mwaka wa uhasibu. Kwa msaada wa mfumo huu, taarifa za mapato ya mwaka wa sasa zinaweza kulinganishwa na taarifa za mapato ya miaka ya awali na kwa msingi wa kulinganisha, biashara hupata habari kuhusu mabadiliko ya mapato na gharama. Ili kudhibiti gharama, mfanyabiashara aweza kuchukua hatua mbalimbali. Hasara za mfumo wa kuweka vitabu vya kuingia mara mbili - Ikiwa kiasi cha shughuli kimerekodiwa vibaya katika jarida, ni vigumu kujua kosa hili. - Ni vigumu sana kupata shughuli yoyote ya biashara ambayo haijaandikwa katika vitabu kuu vya akaunti. - Posting chini ya kichwa cha akaunti makosa lakini upande wa kulia, makosa kama hayo yanaweza si kugunduliwa na mfumo huu. - Makosa ya fidia na makosa ya kutokuwa na uwezo wa kugundua na mfumo huu wa uhasibu. - Mfumo huu ni mrefu zaidi, tata, na tata katika asili.