Double Account System and Short Working

Double Account System is a technique of accounting that maintains two accounts for every transaction. It records both the cash and non-cash transactions separately. The system is used to keep track of the financial status of a company accurately. Short working is the difference between the standard output and actual output of a company for a specific period. This difference arises due to several reasons like machine breakdown, power failure, etc.

The Double Account System records short working in two accounts, namely the Production Account and the Cost Account. The Production Account records the actual output of the company, while the Cost Account records the standard output. The difference between the two accounts is the short working.

Recording Short Working in the Production Account

The Production Account records the actual output of the company. The short working is recorded as a debit entry in the Production Account. The following steps are followed to record the short working in the Production Account:

1. Debit the Production Account with the actual output.
2. Debit the Production Account with the short working.

Recording Short Working in the Cost Account

The Cost Account records the standard output of the company. The short working is recorded as a credit entry in the Cost Account. The following steps are followed to record the short working in the Cost Account:

1. Credit the Cost Account with the standard output.
2. Debit the Cost Account with the short working.

Conclusion

In conclusion, the Double Account System is a technique of accounting that maintains two accounts for every transaction. Short working is the difference between the standard output and actual output of a company for a specific period. The system records short working in two accounts, namely the Production Account and the Cost Account. The Production Account records the actual output of the company, while the Cost Account records the standard output. The difference between the two accounts is the short working.