Double Entry System of accounting deals with either two or more accounts for every business transaction.
For instance, a person enters a transaction of borrowing money from the bank. So, this will increase the assets for cash balance account and simultaneously the liability for loan payable account will also increase.
It’s a fundamental concept encompassing accounting and book-keeping in present times. Every financial transaction has an equal and opposite effect in at least two different accounts.
Equation can be:
ASSETS = LIABILITIES + EQUITY
