KCQ

The key idea for double entry accounting is a proprietor or owner of a firm is separate and distinct from the firm itself.

    When I first read this statement I did not think it sounded right, how could an owner not be responsible? I must admit to struggling with this concept as to me this seems to give owners of companies less responsibility if something goes wrong.

Reading further I understood this is taking in accounting (economic & business) terms but this idea also has been used in terms of legal identity as well.

       But in purely accounting terms I see how it provides balance and an effective duality, two sided nature that works well. The idea every transaction has two sides and debts and credits should always balance seems a very effective way to keep track of a company’s business.