Question

1 Origins of the double entry bookkeeping

2 Why double-entry bookkeeping is so profoundly important in the world of accounting

3 How it differs from other earlier bookkeeping methods?

Answer 1

1. Luca Pacioli is referred to as the Father of Accounting and Bookkeeping and was the first person to record work on double entry system of book keeping.He was the first to describe the system of double entry

2. Double-entry bookkeeping is so profoundly important in the world of accounting because every entry require an debit and credit for each financial transaction which helps in reduction of errors and frauds.It ensure accuracy as debit must be equal to credit.The basic accounting equation assets = liabilities + equity is founded in double entry system.Single entry system has limitation that it cannot be used in large organisation so double entry system is essential.

3.Double-entry is different from other earlier bookkeeping methods because in bookkeeping the type of record that is maintained is that only one effect is recorded either debit or credit effect but in Double-entry both the effects are recorded. Bookkeeping can be used for simple transaction and lower number of transaction but Double-entry is used for complex transaction and large number of transaction.