Under the double-entry system, there are two aspects of every transaction i.e. debit and credit. So, both aspects of each transaction are recorded. In this system, the transaction is recorded on the debit side and also on the credit side. For example, when goods are sold in cash this transaction involves two aspects i.e. cash is received and goods are sold. Thus, in the double-entry system cash account is debited and the sales account is credited. This system is based on the dual aspect principle of accounting that for each debit there must be a credit of equal amount. Following are some Characteristics of the Double Entry System:
Characteristics of Double Entry System
Systematic records: double-entry bookkeeping system maintains the systematic and complete records of each transaction.
Dual aspect: This system is a complete method as it recognizes and records both aspects of a transaction.
Scientific method: this is often considered a methodology because it follows the principles of debit and credit. Also, with complete records errors are often detected and rectified easily.
Arithmetical Accuracy: This method ensures arithmetical accuracy because the total of debit is adequate to the entire of credit together aspect of a transaction is debited and other is credited.
Also, Read 10 Advantages of Double Entry System