Using Double – Entry System
Overview
Double-entry or bookkeeping is a standard system practiced from ancient times and still relevant. This is mainly used to maintain accounts on every transaction and maintaining a balance between these transactions. This system is based on the accounting equation (Liabilities + owners’ equity = Assets). It regulates the entered debit amounts must be equal to credit accounts. It also checks that company cash that spends out from the account, gaining in return or not, such as supplies, etc. Each transaction is maintained in a general ledger document.
Uses And Applications
- Increases income by receiving money from pre-deposited money into a business bank account.
- From, utility expenses, you can pay electricity bills that edited as debit, while credit added to cash results in decreasing assets.
Set-Up Double Entry System
- First, set your financial records then select ‘chart of account’ by using proper guidelines given by accounting software for accounts that required in business.
- Use ‘chart of account’ as a reference for selecting two or more accounts for editing transactions into your ledger file.
- Use “general journal entry” in which the first entry is for ‘account and debited amount’ and the second entry is for ‘account and credited amount’.
- Always use accounting software for auto-generate of transactions and sales invoices.
Benefits
- It reduces calculation mistakes and increasing accuracy.
- Increases awareness in accounting by providing detailed information.
- It increases the rate of production (statements, net statements, etc.).
If the problem persists after following these steps, then consult the QuickBooks Customer Service team to get your problem resolved by them.
