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Double Entry

5 August, 2015 - 17:27

Double Entry is the principle of accounting which requires that every transaction has two effects one of which is a debit and the other of which is a credit of the same amount. What this means is that the total of the Debits must always equal the total of the Credits.

In this example we deposit 10 units of currency into our bank account.

Journal - Page 1

Date

Description

Post Ref.

Dr

Cr

2005 Feb

1

Bank (Asset)

 

10

 
   

Cash (Asset)

   

10

 

Since the total of the Debits equals the total of the Credits we say the transaction is Balanced.