Bookkeeper keeps on using the various tactics and techniques of keeping the business balance. One among them is “double entry bookkeeping”. Double entry is the tactic of bookkeeping in which every transaction is made to give two of the opposite evidences on it.
It is a system of accounting in which each and every transaction comes with dual corresponding values. One comes in positive unit and the other in the negative unit. This is how, double entry bookkeeping gives the transactions two parts. And these two parts in turn affect two ledger accounts.
What will be the double entries?
As we are saying double entry bookkeeping will contain dual entries and their effect so a question will arise what these two entries are. Let me clear you that these two entries will be:
i. Debit entry
ii. Credit entry
From the above discussion it is clear that whenever we transact the money from the dual entry book-keeping it will keep the record in two different accounts. One will be the debit account i.e. the record of the account which will receive the money and the second will be the credit account i.e. the account which will pay the credit.
Why it will be near to flawless:
When we will use the Bookkeeper Melbourne who will save the transaction in “double entry book-keeping” then it will make the transaction record near to flawless. The reason is, record will get saved at two different positions with the same result. Any difference in any of the entry will clearly debit that something going wrong. It means, the bookkeeper will be able to spot the problem before it becomes a blunder.
The formula on which double entry works:
Double entry in bookkeeping works on the accounting equation which I near to the formula for calculations. And it is like:http://www.tampabay.com/blogs/the-buzz-florida-politics/senate-questions-legality-of-enterprise-floridas-bookkeeping/2245523
A + E = L + OE + R
Now if we look at the above equation then we will come to know that A will stand for assets, E for expense, L for liabilities, and OE for owner equity and R for revenues. And it is showing the the right side of the equation is directly proportional to the left values of the equations.
Dual side system:
The double entry Bookkeeper Melbourne will act in dual side system. The right side will indicate the value of the credit whereas the left side will indicate the value of the debit. It means, while doing any sort of transaction the bookkeeper will do entries on both of the sides,
What is to understand?
Here are little concepts that you must understand before putting your hand for double entry system. In double entry system of bookkeeping debits will always show the value of “expenses”, the credit entry will always show the value of “credits”. And when the amount will be received the bookkeeper will debit the cash account. And when the amount of value will be paid, the Bookkeeper Melbourne will credit the cash account.visit us now!