DUAL START SYSTEM

CHARGING AND SUBSCRIPTION AGREEMENT AND DUAL START SYSTEM

To charge or debit an account is to make an entry in the debit, whereas to pay or to credit an account is to make an entry in the credit. In asset accounts, when it increases, they are charged, and when it decreases, they are paid. In the accounts of liabilities and capital, when it increases, they are paid, and when it decreases, they are charged.

DUAL START SYSTEM

Dual start system consists of the fact that, in each accounting event, at least one charge must be produced in one account and one in another, and the sum of the charges must be equal to the sum of the allowances made; In other words, all the resources that exist in a company are the result of the application of resources that had a defined source.

BALANCE

Balance of an account is called the difference between debits (notes made on the debit of an account) and credits (notes made on the account holding). When the debts are greater than the credits will be debit balance, however when the credits are greater than the debts will be credit balance. When the debits are equal to the credits, it will be understood that the account is settled, balanced or without balance.

Elaboration of the balance sheet and income statement

When all book entries have been made in the journal, the balance of each of the accounts is calculated and a transient state called the balance of checks or balances is drawn up, which is a list of all open accounts with their balance. The total of the credit balances must be equal to the sum of the debit balances, due to the mentioned system of double entry. Starting from the balance of amounts and balances, the so-called regularization entry is made in which all income and expense accounts are regularized and the profit and loss account appears. The balance sheet is thus obtained after regularizing the checking balance.