ĭouble-entry bookkeeping is governed by the accounting equation:Īt any time point, the equation should be true. In the dou- ble-entry accounting system, at least two accounting entries are required to re- cord each financial transaction where every entry to an account requires a corresponding and opposite entry to a different account.
The classic accounting was established in 1494 by Italian mathematician Luca Pacioli who was the first person to publish a work on the double-entry system of book-keeping. Recombining accounts, which simplifies the accounting concepts and helps peopleīetter understand the world through accounting.Īccounting, recognized as the “language of business”, counts the results of economic activities of an organization and conveys this information to stakeholders, investors, creditors, management, and regulators. That the nature of accounting is a process of moving cashlets between accounts and a process of Philosophically, when people give, they get credits when people
#Debit credit analysis plus#
In cashlet theory,Ĭredit always means positive or plus (+), while debit always means negative or
Graphs are introduced to visualize the process. The account that gives cashlets is credited, while the account that takes cashlets Transferring cashlets from one account to another just in the same way of aĬhemical redox reaction that transfers electrons from one chemical species toĪnother. By comparing accounting transaction with chemical reaction, theĪuthor finds out that an accounting transaction is actually a process of Cashlet is defined as a basicĪccounting unit with a value of negative one in the same way that electron is Into accounting area enlightened by chemistry. This article introduces a novel concept of cashlet However, accounting is notĮxplained in a way that can be easily understood even for very basic concepts Subjects that help people understand the world. Just like mathematics and science, accounting is one of the Is the “language of business”, which records how our society works from the
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