All economic actions are of a dual nature, it is for this reason that they are recorded in the balance sheet using the double entry method. In accounting, a double entry is the interconnected simultaneous display in the balance sheet of business transactions of the same amount of money on the credit of one balance sheet account and the debit of another. The relationship between the accounts is called the correspondence of the accounts, and the accounts themselves are called the corresponding ones.
The essence of double entry
Accounting is impossible without balance sheet accounts and double entry. All records of economic activities are kept based on primary documents, with their help they are confirmed. A double entry shows the ways of receipt and disposal of certain funds, the types of operations that carried out changes in these funds, the sources of their formation, as well as financial results characterizing production activities.
In an economic sense, the double entry shows the dual nature of the property of the enterprise. In the balance sheet, it is considered from two sides, namely, the composition and placement - in the asset of the balance sheet, and the methods of their formation - in the liability. The total of all entries in the asset items is invariably equal to the total in the liability, which makes it possible to easily check the accuracy of accounting entries. Drawing up transactions showing the essence of business transactions is impossible without the accountant's understanding of the essence of the process and all those changes to which they ultimately lead. The specialist is forced to work with a variety of documents, each of which acts as a carrier of economic and legal information about the movement of finances and material values.
Before recording transactions on offsetting accounts, it is necessary to analyze the primary documents. The choice and double entry on each paper of the corresponding accounts must be confirmed by the signature of the accountant who made it. The accuracy of the recorded accounting transactions on the accounts depends on the correctness of the corresponding accounts. Each accounting paper is a written certificate of the performed business transaction, confirming its veracity. The absence of such documents or their incorrect execution brings big problems with the inspection bodies, employees, investors, suppliers, etc.
Manifestations of duality in accounting
In addition to double registration in the same amount of each fact of economic activity, accounting implies the duality of most other procedures. For example, there are two systems of records - systematic and chronological, two types of registration - analytical and synthetic accounting. Accounts are also divided into two groups: material and personal, each of which, in turn, has two items - debit and credit. Moreover, all economic activity is carried out by two parties. Information flows have two points - entry and exit. And finally, any accounting work is carried out twice - first of all, the facts are recorded, and then the correctness of the work done is checked.
In accounting, three required attributes are formed - these are accounts, balance and double entry. They create visual harmony, because debit is always equal to credit, and the asset is not at odds with the liability.
