Double-entry accounting
noun also double-entry bookkeeping
A way of recording every transaction in at least two accounts, so that total debits always equal total credits.
Money moves. It never appears.
Every transaction has a source and a destination, recorded as a debit in one account and an equal credit in another. Pay a bill and cash goes down while an expense goes up by exactly the same amount.
Because the two sides must match, the books check themselves. If they stop balancing, something was recorded incompletely. Every financial statement is built on that guarantee.
| Account | Debit | Credit |
|---|---|---|
| 6420Software & hosting | $12,345.00 | none |
| 1010Operating account | none | $12,345.00 |
| Total | $12,345.00 | $12,345.00 |
Key points
01
Two sides, one amount
Each entry touches at least two accounts, and its debits equal its credits.
02
Debit is not “minus”
A debit raises assets and expenses; a credit raises liabilities, equity and income.
03
Self-checking
A trial balance that does not net to zero points straight at a missing half.
04
Corrected, never erased
Mistakes are fixed with a reversing entry, so the history stays intact.
In comma
comma is a real double-entry ledger. An entry that does not balance is refused before it is saved, so the books cannot quietly drift.
Clear books. A clearer head.
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