double-entry bookkeeping

Examples of double-entry bookkeeping in the following topics:

• A short history of accounting and double entry bookkeeping

  • "The treatise described double-entry bookkeeping—that for every credit entered into a ledger there must be a debit, a concept created by Florentine merchants and hailed by Goethe as "one of the most beautiful discoveries of the human spirit".
  • In my opinion, Goethe was exaggerating when he called double entry bookkeeping "one of the most beautiful discoveries of the human spirit".
  • At any rate, the discovery of double-entry bookkeeping was undeniably important, because, as Wikipedia explains:
  • Here is a simple example to give you a feel for the way that double entry bookkeeping works:
  • First, a single transaction affects two accounts (a double-entry).

• Double-Entry Bookkeeping

  • A double-entry bookkeeping system requires that every transaction be recorded in at least two different nominal ledger accounts.
  • A double-entry bookkeeping system is a set of rules for recording financial information in a financial accounting system in which every transaction or event changes at least two different nominal ledger accounts.
  • In the double-entry accounting system, each accounting entry records related pairs of financial transactions for asset, liability, income, expense, or capital accounts.
  • The accounting entries are recorded in the "Books of Accounts".
  • There are two different approaches to the double entry system of bookkeeping.

• Summary and discussion questions

  • Next we covered the advantages of the system of double-entry bookkeeping and how, together with ledgers and other accounting records, it enhances the accuracy of information maintained in an accounting system, whether it is manual or computer-based.
  • Explain the advantages of double-entry bookkeeping.
  • Do you agree with Goethe's description of double-entry bookkeeping as Goethe as "one of the most beautiful discoveries of the human spirit"?

• Introduction

  • understand the advantages of double-entry bookkeeping; types of ledgers and basic reports

• Consumers of Accounting Information

  • Cruder forms of accounting were inadequate for the problems created by a business entity involving multiple investors, so double-entry bookkeeping first emerged in northern Italy in the fourteenth century, where trading ventures began to require more capital than a single individual was able to invest.

• Basic financial statements

  • Next, we will discuss a short history of accounting and the invention of double-entry bookkeeping, a technique that is of great assistance to accountants and bookkeepers in assuring the accuracy of accounting records and the reports that are prepared from them.

• Usage of Accounting Information

  • As a result, double-entry bookkeeping first emerged in northern Italy in the 14th century, where trading ventures began to require more capital than a single individual was able to invest.

• Ledgers

  • A ledger is simply a collection of the accounts of your business where transactions are recorded using the double-entry bookkeeping method.
  • In the case of the Accounts Receivable example, when a sale is entered in the ledger, a corresponding entry is made in a Sales Journal.
  • And, when a payment is received and posted to a customer's account in the Accounts Receivable ledger, a corresponding entry is made in a Cash Receipts Journal.
  • Setting up subsidiary ledgers and journals for special purposes like this shields the General Ledger from an excessive amount of detail and, at the same time, preserves the principle of double-entry accounting, makes reconciliations easier and, in general, promotes accuracy in a company's accounting records.
  • Without proper bookkeeping, your blooming company can take an abrupt dive towards bankruptcy.

• Government and Nonprofit Accounting

  • The unique objectives of government accounting do not preclude the use of the double entry accounting system.