Would you explain how the rules of double entry are developed from the accounting equation?

Question

Would you explain how the rules of double entry are developed from the accounting equation?

Answer 1

Accounting equation is Assets = Liabilities + Equity.

If one of the assets increased(e.g. cash), then one of the liabilities or equity or more of these must increase also. Sometimes, the cash increased may be due to sales, therefore another type of asset (inventory) has decreased.

In order for the accounting equation to be always true, if assets increased, then liabilities or equity must increase by the same amount. OR another type of asset will be decreased by the same amount, therefore liabilities and equity will remain unchanged.

Accounting is the most meaningful thing in the world, you work for money, the work is the equity and the money is the asset, they must be of the same value in dollar terms, if not the same, either you don't get the job, or you don't want the job.

Another example is, you buy something, the value of that good must be equal to the money that you spent on it. Even if they are not the same, maybe with some elements of goodwill, you still record the cost of purchase to be equal to the dollar value spent on it.