All business operations are dual in nature, and therefore it is customary to reflect them in the balance using the double entry method. In accounting, a double entry is an interconnected and simultaneous reflection in the balance sheet of economic operations with the same amount on a loan of one balance sheet account and a debit of another. In this case, the mutual relationship arising between the accounts is usually called the correspondence of accounts, the accounts themselves are called the correspondence. Balance sheet accounts and double entry, in fact, are methodological techniques, without which it is impossible to carry out accounting.
Recording of any business transaction is possible only on the basis of primary documents, with which it is confirmed. A double entry makes it clear where certain funds came from and where they left, what operations made changes to these funds, and, accordingly, the sources of their formation, as well as what financial results the production activity is characterized by.
Economically, a double entry reflects the dual nature of the property of an enterprise, and therefore it is considered in the balance sheet from two perspectives: composition and placement in the balance sheet asset, and sources of formation in liabilities. The total amount of entries in an asset is always equal to the total of those in liabilities, so you can easily verify the accuracy of accounting entries.
Compiling or constructing transactions that reflects the essence of business operations requires a specialist accountant to be creative and have a deep understanding of the essence of this process, an understanding of the changes that they lead to. The employee has to deal with a variety of documents. Each of them is a carrier of economic and legal information - information about cash flows and material values.
One of the stages preceding the recording of the transaction on the offsetting accounts is the preliminary accounting processing of the primary documents. The selection and double entry on each document of the corresponding accounts - account assignment - is certified by the signature of the accountant who made it. Correct correspondence of accounts is fundamental in the organization of accounting, its reality and reliability, since the foreground in any case is the truthful display of business transactions on accounts.
All accounting documents are written evidence of the fact of fulfillment or of the right to carry out a business transaction, they serve as an important proof of its reliability.
The absence of any primary documents or their improper execution can create serious problems not only with inspection bodies, but also with employees, investors, partners, suppliers, customers, etc. Consequently, double entry as the principle of double reflection on accounts and the main method of accounting, requires the confirmation of its legitimacy by primary documents. Their balance serves as a confirmation of the reality and correctness of accounting.
It is curious that in addition to double registration in the equal amount of each fact of economic activity, accounting assumes the duality of many other procedures and attributes. For example, there are two systems of records - systematic and chronological, two types of registration - analytical accounting and synthetic, two groups - material and personal accounts, each account has two sections - debit and credit. In all facts of economic life, two persons participate, two sides. All information flows also have two points - entry and exit. Even an accountant performs any work twice - first, he registers the facts, and then checks the correctness of the work performed. The duality of accounting is observed in all its manifestations.
In accounting , three indispensable components are always formed - accounts, double entry and balance. They maintain the illusory nature of harmony, because debit is always equal to credit, and an asset always converges with a liability.