Double-entry bookkeeping
Financial Accounting glossary · The Accounting Cycle & Financial Statements
Definition
Recording system in which every transaction is recorded with equal debits and credits.
Double-entry bookkeeping in plain English
The big idea: money never just appears or vanishes — it always MOVES from one place to another, so every transaction has two sides. Double-entry means you record BOTH sides every time: where the value came from and where it went. If you buy a $500 laptop with cash, one entry shows the laptop arriving and the other shows the cash leaving — the two amounts are equal (an equal 'debit' and 'credit'), which is why your books stay balanced. It's like tracking both ends of a bucket brigade: water leaves one bucket only by filling another, so the totals always match and mistakes stick out.
Practice Double-entry bookkeeping
Under the rules of double-entry bookkeeping, what is the normal balance of an Asset account?
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