How Banks use Double-Entry Accounting System ?
Double entry accounting is the standard method of recording every business transaction in two different places to reflect a debit and a credit.
Double entry is the bookkeeping principle which states that every financial transaction has equal and opposite effects as both an asset and a liability, and therefore it must be recorded as such in two separate places.
Double entry satisfies the accounting equation:
Assets
=
Liabilities
+
Equity
Assets=Liabilities+Equity
In a double-entry accounting system, credits are offset by debits in a general ledger or T-account.