Answer to Question #245481 in Accounting for lolo

Question

Discuss the concept of the double entry and elaborate on its relevance to the duality concept

Answer 1

Double entry principle is based on duality concept and states that for every transaction there must be two accounts affected, there must be a debit entry and corresponding and equal credit entry at any given time. For example; A sale of furniture at $100 will have a debit Entry Dr for Furniture $100 and corresponding credit entry of Cash $100.

The relevance of duality concept is that; firstly, it helps in ensuring completeness of accounts by ensuring all affected accounts are put into consideration. Secondly, It reduces unnecessary errors helping accounts and statements to balance like The Trial balance and by that helps to know how to track errors from the transactions.