Presentation

on

Double Entry

System

Introduction

Classification of accounts

Rules of double entry system

Advantages of double entry system

Disadvantages of double entry system

Double Entry Double Entry SystemSystem

Double Entry is the methods of writing every

transaction in two aspects-

Debit

Credit

Classifications of AccountsClassifications of Accounts

Personal

Impersonal

Personal AccountsPersonal Accounts

Natural Person’s Account

Artificial person’s Account

Representatives Person’s Account

Impersonal AccountImpersonal Account

Real Account

• Tangible Real a/c

• Intangible Real a/c

Nominal Account

Rules of Double Entry System

Personal Account

Debit Credit

Receiver

Giver

Personal Account

Debit Credit

Receiver

Giver

Personal Account

Debit Credit

Receiver

Giver

EXAMPLE:

RAM PAID 2000 RS. to SHAM

Sham a/c dr. 2000 To Ram 2000(being ram paid to sham)

Real Account

Debit Credit

What Comes In

What Goes Out

Real Account

Debit Credit

What Comes In

What Goes Out

Real Account

Debit Credit

What Comes In

What Goes Out

EXAMPLE:

Furniture purchased RS. 2000.

Furniture a/c dr. 2000 To cash a/c 2000(being furniture purchased)

Nominal account

Credit

Expenses &

Losses

Incomes &

Gains

Debit

Nominal account

Credit

Expenses &

Losses

Incomes &

Gains

Debit

Nominal account

Credit

Expenses &

Losses

Incomes &

Gains

Debit

EXAMPLE:

Rent paid Rs. 2000.

Rent a/c dr. 2000 To cash a/c 2000(being rent paid)

EXAMPLE:

Interest received Rs. 2000.

Cash a/c dr. 2000 To interest a/c 2000(being rent paid)

AdvantagesAdvantages

Records the aspects of every financial

transaction.

Gives accurate information of amount.

Helpful in preventing frauds & errors.

Helpful in preparing the profit and loss account.

DisadvantagesDisadvantages

Requires the maintenance of multiple

books.

System is costly.

There is no guarantee of absolute accuracy

of books.