The Double Entry System, Ledgers & Balancing Accounts 🧮

### Master the Art of Commercial Numbers! 📊 In financial accounting, every financial transaction has a **dual effect** (two sides)! **1. The Core Accounting Equation**: $$\text{Assets} = \text{Capital} + \text{Liabilities}$$ * **Assets**: What the business owns (Cash, Bank balance, Inventory, Buildings, Equipment). * **Liabilities**: What the business owes to outsiders (Creditors, Bank loans). * **Capital (Owner's Equity)**: The owner's net stake in the enterprise. **2. Golden Rules of Double Entry**: * **For Every Debit entry, there must be a corresponding Credit entry!** * **DEBIT (Dr.)**: * An Increase in an **Asset** account ($+$ Asset) * An Increase in an **Expense** account ($+$ Expense) * A Decrease in a **Liability** account ($-$ Liability) * **CREDIT (Cr.)**: * An Increase in a **Liability** account ($+$ Liability) * An Increase in an **Income / Revenue** account ($+$ Revenue) * An Increase in **Capital** ($+$ Capital) * A Decrease in an **Asset** account ($-$ Asset)