In Chapter 2, you’ve learned about the day books and I briefly mentioned that the data from the day books goes to ledger accounts. In this chapter you’ll learn more about the system which underpins all accounting transactions (including the day books), the double entry system of accounting. By the end of this chapter you’ll have a good understanding of the double entry system and finally understand what accountants are talking about when they mention words like ‘debit’ and ‘credit’.

The chapter starts with a brief history of the origins of double entry accounting. You’ll then learn how the system works, along with some simple rules. Throughout ...

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