Double Entry and Accrual Basis of Accounting

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Double Entry

The term "double entry" means that each transaction impact at least two accounts. For example, if an Entity borrows $10,000 from its bank, the business Cash account balance increases, and the business Notes Payable account increases. Double entry also means that one of the accounts will show as a debit, and one of the accounts will show as a credit. For each transaction, the debit amount must equal the credit amount.

Accountings of Accruals

Under the accrual basis, the expenses are reported when they are incurred and for which revenue is generated. To give the accurate statement and view the income of past, present and future incomes should be projected. For example, Income made by the business during a period can be measured only when the revenue earned during a period is compared with the expenditure incurred for earning that revenue.

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