A method of keeping books that requires offsetting entries. For every debit there must be an equal credit. If you deposit money in your bank account (a debit) there must be an offsetting entry. Where did the money come from? Was it from sales or a bank loan perhaps, either of which would be increased (a credit) for an equal amount to that deposited in the bank.
The 500 year-old accounting system where every transaction is recorded into at least two accounts. To learn more, see Explanation of Debits & Credits. To Top
A system of reporting transactions, based on recording increases and decreases in accounts so that debits always equal credits.
The term used to refer to the recording of any credit or debit parts of a transaction.
An accounting system used to keep track of business activities. Double-entry accounting maintains the balance sheet (Assets = Liabilities + Owner's Equity). When dollars are recorded in one account, they must be accounted for in another account in such a way that the activity is well documented and the balance sheet stays in balance. You may not need to be an expert in double-entry accounting, but the person who is responsible for creating the financial statements better get pretty good at it. If that is you, go back through the book and focus on the "gray" sheets. Study the examples and see how the double-entry method acts as a check and balance of your books. Remember the law of the universe: What goes around, comes around. This is the essence of double-entry accounting.
In double-entry accounting, every transaction has two journal entries: a debit and a credit. Debits must always equal credits. Double-entry accounting is the basis of a true accounting system.
A system of recording transactions in a way that maintains the equality of the accounting equation.