The double entry system may be divided into three stages :
William Pickles defined double entry system as,"The Double Entry System seeks to record every transaction in money or Money's worth in its double aspect- the receipt of a benefit by one account and the surrender of a like benefit by another account, the former Entry being to the debit of the account receiving and the letter to the credit of the account surrendering." It is this recording of two-fold effect of every transaction that has given rise to the term Double Entry" J.R.Btliboi defined double entry system as, "Every business transaction has a two-fold effect and that it affects two accounts in opposite directions and if a complete record is to be made of each such transaction it would be necessary to debit one account and credit another account. Some of the important definitions of double entry system are as follows. This system is based upon the fact that each business transaction affects two accounts, one account is that which receives a benefit in the form of cash, goods or services, and the other account shows the corresponding loss or benefit by it. The double entry system is the system which is used in the business world of modern times, since it enables a trader to obtain the maximum information as to his business affairs from his book-keeping records. To what account a certain dealing is given and by what account, the same dealing is taken. It is the most perfect, scientific and complete system of recording business transactions.ĭouble entry system means keeping accounts from both aspects of giving and taking. Double entry system of book-keeping has emerged in process of evolution of various accounting techniques.
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