What is double-entry bookkeeping?
There are many business transactions that must be recorded in separate accounts, for example: sales, purchases, debts, expenses, etc.
Each transaction is recorded in a separate account – cash account, the liabilities account. The bookkeepers use a system that records two aspect of every transaction – double-entry bookkeeping.
Every transaction is both a debit – a deduction – in one account and a credit – an addition – in another. For example, if a company buys raw materials for production, it debits its purchases account and credits the supplier’s account.
Each account records debits on the left and credits on the right. The total debits should always equal the total credits. Accountants and bookkeepers call these accounts T-accounts, because they look like a ‘T’ letter - look at the examples below.
Double-entry bookkeeping – zasada podwójnego księgowania
An account - konto
A debit – ‘winien’ – lewa strona rachunku rozliczeniowego, obciążenie
A deduction - potrącenie
A credit – ‘ma’ – prawa strona rachunku rozliczeniowego, uznanie
An addition - dodawanie
An asset – składnik aktywów
A liability – zobowiązanie
To increase – wzrastać
To decrease – zmniejszać się
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