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This theory insists that items or actions relating to a business must be recorded equally as a debit and credit items. For example if a company sells a product for cash, there must be an entry for both sales and cash in their respective T - Accounts.

The concept of increasing 'like with like' is used to accurately determine whether items are logged as credit or debit items. Using the same example, as sales is a credit item, the sale of the product is recorded in the credit section as there was an increase in sales, whilst as cash is a debit item, it's logged under the debit section as there was an increase in cash.

However, if a company purchases a product for cash, the purchase is logged in the debit section of that T-Account as it an increase in purchases, although the cash is logged in the credit section as there was a 'decrease in cash'. By following this theory, the concluding Trial Balance will reflect the accuracy of the entries as both the Debit and Credit section should total to the same amount.

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