Double Entry System affects two accounts in opposite direction. It is based on the principle that "Every debit has a credit and every credit has a debit".Every business transaction has two-fold effect and that it effects two accounts in opposite directions and if a complete record are to be made of each transaction, it would be necessary to debit one account and credit the other.
Both personal and impersonal accounts (Real and Nominal accounts) are recorded in Double Entry, one account is debited and any other account may be credited.
(i) Rules regarding the recording of Personal Accounts: Personal accounts relate to an individual, firm, company or an institution are called personal accounts such as J.5. P. K. account. Accounts of State Bank of India - Accounts of Oswal Book Agency, capital account of proprietor, drawings account etc.
The simple rule for recording a transaction in personal accounts "Debit the receiver and credit the giver." Examples:
(i) Paid Rs.20,000to Vijay
(ii) Received Rs.10,000from Krishna
Following transactions can be recorded as under:

(ii) Rules regarding the recording of Real Accounts under Double Entry System: The accounts relating to assets whose value can be measured in terms of money are termed as Real Account such as Cash Account, Machinery Account, Furniture Account, Building Account and Goodwill Account etc.
The simple rule for recording of Real Accounts transaction is "Debit what comes in and credit what goes out." Examples:
(i) Purchased furniture for Rs.50,000
(ii) Sold Machinery for Rs.20,000
Recording of the above transactions are as under :

Financial accounting records contain factual financial information. All business transactions should be evidenced by documentary evidence. For example, a cash memo showing cash sale, an invoice showing sale of goods on credit, the receipt made out by the payee when cash is paid to him, are all examples of source documents. This business document is called the source document. Source document is an evidence in support of a transaction. It is also called supporting document. A source document is the first record prepared for a business transaction. Entries in accounting books are always made from the source document. These documents must be preserved in any case till the audit of the accounts and tax assessments for the concerned period are completed. A source document also serves as the legal evidence in case of dispute. On the basis of this record, first of all, we write which accounts are to be debited and which accounts are to be credited.
A voucher is documentary evidence in support of a transaction. Cash memo showing cash sales, an invoice showing credit sale of goods, receipt made out by the payee when cash is paid to him are the examples of voucher These must be preserved in any case till the audit of the accounts and tax assessments for the relevant period are completed. It is document to record the accounting transaction.

Journal is the basic book of original entry. In this book, transactions are recorded in the chronological order, as and when they take place. A fterwards, transactions from this book are posted to the respective accounts. Each transaction is separately recorded after determining the particular amount to be debited or credited.

In Double entry book keeping system of accounting for every credit there is equal debit and vice-versa. Heaving and use of debit and credit depends on the types of Accounts as follows:
For Personal Accounts:
Debit the receiver; Credit the giver
For Real Accounts:
Debit what comes in; Credit what goes out.
For Nominal Accounts:
Debit all expenses or losses; Credit all incomes and pains.

                                                     Accounting Equation: Assets = Liabilities + Capital