Q 1-1
Why do we have double-entry accounting?
Why do we put in everything twice?
Why not just once?
We us double entry accounting as a way of checks and balances, Debts must = credits.
To give an example of how this works.
I go into a store and buy a coke.
Seller is now one drink short but on the other side they now have an increase of cash. Both records need to be recorded 1) the coke can 2) the cash (double entry) to give a balanced approach. This provides a means of checks and balances (debts must = credits) Balanced.
If we only recorded one side of this it would give us an incomplete picture.
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ReplyDeleteCheers, Rae