Double-entry accounting records every transaction with equal debits and credits. Each entry affects at least two accounts so the books stay balanced.
Core ideas
- Accounts are grouped as assets, liabilities, equity, income, and expenses.
- Every transaction must balance: total debits equal total credits.
- The accounting equation holds: assets = liabilities + equity.
Example
If you buy equipment for cash, debit the equipment asset account and credit the cash asset account for the same amount.