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explain the double entry mechanism with an illustr...

Question:
Explain the double entry mechanism with an illustrative example.

Answer:

Double Entry mechanism is the most progressive, scientific and complete system of recording the financial transactions of a business. According to this system there are two accounts involved in every business transaction.One account receiving a benefit and the other account yielding a benefit. The person or the account receiving a benefit is debited and the person or the account who gives something to the business is credited.

For example- we received ₹20,000 from Mohan. This transaction affects two accounts- Cash Account and the Johan's Account.

Cash account is receiving a benefit (as cash is coming in) and hence Cash account will be debited, whereas Mohan is yielding a benefit and hence his account will be credited.

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Popular questions of class 11 Accountancy

Mr. Sunrise started a business for buying and selling of stationery with ₹ 5,00,000 as an initial investment. Of which he paid ₹ 1,00,000 for furniture, ₹ 2,00,000 for buying stationery items. He employed a sales person and clerk. At the end of the month he paid ₹ 5,000 as their salaries. Out of the stationery bought he sold some stationery for ₹ 1,50,000 for cash and some other stationery for ₹ 1,00,000 on credit basis to Mr. Ravi. Subsequently, he bought stationery items of ₹ 1,50,000 from Mr. Peace. In the first week of next month there was a fire accident and he lost ₹ 30,000 worth of stationery. A part of the machinery, which cost ₹ 40,000, was sold for ₹ 45,000.

From the above, answer the following :
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2. What are the fixed assets he bought?
3. What is the value of the goods purchased?
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6. What is the gain he earned?
7. What is the loss he incurred?
8. Who is the debtor? What is the amount receivable from him?
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Question:
Explain the double entry mechanism with an illustrative example.

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Question: Explain the double entry mechanism with an illustrative example.

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Question:
Explain the double entry mechanism with an illustrative example.