The double entry system including recording transactions from source documents in books of prime entry and ledger accounts
Every financial transaction a business makes gets recorded twice — once as a debit and once as a credit. Businesses first capture transactions from paper documents, then transfer them into formal accounting records called ledgers.
Formula
Debits = Credits (for every transaction)
Real World
When Amazon pays a supplier invoice, its accounts payable account is debited and its cash/bank account is credited — the same double entry principle used since Venetian merchants codified it in 1494.
Exam Focus
Always state which account is debited AND which is credited; a one-sided entry earns no marks even if the amount is correct.
Essay Framework
Use PEEL to structure every paragraph. Tap each step for guidance and an example.
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