In my accounting class we are being asked to post responses to what others post. I...

In my accounting class we are being asked to post responses to what others post. I need some help responding to this post. I MUST have a source to reference in my answer. Any help you can give me would be greatly appreciated.

A financial transaction is an agreement that occurs between a buyer and a seller when payment and a service or product is exchanged. The dual effect, also known as double accounting, is similar to a concept in physics where for every action, there is an equal and opposite reaction (Advani, 2018). In relation to the accounting equation for example, when an asset is increased, there must be an equivalent transaction; decrease in another asset, increase in a liability, or increase in equity (Kimmel & Weygrandt, 2017). If a car is purchase and a person pays cash, they experience a decrease in cash; on the other hand, the person gains an asset in owning a vehicle. Similarly, the company that sold the car is decreasing inventory by selling a car but will come across an increase in revenue.

Please remember that I MUST have a source to reference! Thank you so much!

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Expert Solution

The double-entry system of accounting or bookkeeping means that for every business transaction, amounts must be recorded in a minimum of two accounts. The double-entry system also requires that for all transactions, the amounts entered as debits must be equal to the amounts entered as credits.

Accounting is an art of recording, classifying and summarizing the transactions of financial nature measurable in terms of money and interpreting the results thereof. Two methods for accounting are Single Entry System and Double Entry System. Mostly, we convert to Double Entry for better accounting purposes.

For any transaction to be accounted in Journal it has to follow the Accounting golden rules any transaction will be divided in to debit and credit and following the rules it has to recoreded.

Account Type	Debit	Credit
Personal Account	The Receiver	The Giver
Real Account	What Comes in Dr	What goes out Cr
Nominal Account	Expenses/Losses	Incomes/ Gain

ekkarill92 answered 1 year ago

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