Double Entry System

Every business transaction affects two or more accounts. Under Double Entry System, equal debit and credit entries are made for every transaction. If more than two accounts affected by a transaction , the sum of debit entries must be equal to sum of the credit entries

It can be explained by simple equation :

Liabilities + Capital = Assets

Increases on the left hand side of a ledger  are called credit balance 

Increases on the right side side of a ledger are called debit balance

Similarly, Decreases on the left hand side are called debit balance and

               Decreases on the right hand side are called credit balance