What is  double entry bookkeeping?

By following the double-entry system, you should ensure you record items in the debit and credit sections.

Remember that debit in one account will offset credit in another account.  Primarily the sums of all the debts will be equal to the sum of the credits.

This system is entirely intrinsic in standardizing your accounting process and reduces errors in the accounting process.

The Financial Accounting Standards Board (FASB) plays a very crucial in governing the generally accepted accounting principles (GAAP).

According to FASB, there are various rules and methods every business should comply with within the double-entry accounting process.  Some of the important rules include...

DEBITS: All debits should be recorded on the left side of the ledger sheet Debits will increase the asset account and decrease the liability or equity account Debits decrease revenue and increase expenses account

CREDITS: All credits should be recorded on the right side of the ledger account Credits will decrease the asset account and increase the liability or equity account Credits increase the revenue and reduce the expenses account

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