The Accounting System

Narration

The total structure of records and procedures which identify, classify, record, and report information on the company´s financial position and transactions is called the accounting system.

The accounting system records into specific accounts all the similar transactions that occur in a business.

For easy reference, each account used in a company is assigned a unique number. A systematic listing of all accounts used by a company is called the chart of accounts.
Each account has a left side (called the debit side) and a right side (called the credit side).

Recording an amount on the debit side of the account is called debiting the account, debit, or debit entry.

Recording an amount on the credit side of the account is called crediting the account, credit, or credit entry.

For every entry made to the debit side of an account or accounts, an entry for a corresponding amount or amounts must be made to the credit side of another account or accounts.

This is the rule of double-entry accounting, also called “double-entry accounting system”, “double-entry bookkeeping”, or “double-entry bookkeeping system”.

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