Double Entry
Table of Contents:
Definition of Double Entry
A fundamental concept underlying today's bookkeeping and accounting which states that every financial transaction involves at least two accounts.
What is Double Entry?
Double-entry accounting is a method of bookkeeping in which every financial transaction is recorded in two or more accounts. This is because every financial transaction has a relationship or effect on at least two accounts.
Example of Double Entry
As an example, when a business gets an income, the company's cash account will increase and the sales account will also increase.
| Date | Remarks | Account | Debit | Credit |
| 8/8/19 | Sale | Cash | USD 1,000 | |
| Sale | USD 1,000 |
In the example above, the two accounts involved in this transaction are debit and credit accounts. The amount on the debit account will increase, and the amount on the credit account will decrease. And the total amount of debits and credits must always be the same.
