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.