Explain double-entry bookkeeping to someone new, using a simple example.

What the interviewer wants to hear

• Every transaction affects at least two accounts
• Total debits always equal total credits
• Links to the accounting equation assets = liabilities + equity
• Gives a concrete example with the debit and credit sides

Model answer

Double entry means every transaction is recorded in at least two accounts, with equal debits and credits. It comes from the accounting equation: assets equal liabilities plus equity, so if one side changes, something else must change to keep it in balance. For example, if we buy a laptop for ₹60,000 on credit from a supplier, the office equipment account, an asset, is debited ₹60,000, and the supplier account, a liability, is credited ₹60,000. When we pay the supplier, we debit the supplier to clear the liability and credit the bank. The benefit is control: because debits and credits must match, the trial balance can show many recording mistakes, and every balance can be traced back to the entries that built it.

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