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The basics of double-entry accounting.


The double-entry system of accounting is used to records business transactions. No matter how simple or complex the transaction, it is recorded in ledger accounts with a debit and credit entry. The rules are double-entry accounting are incorporated into all accounting software, even if you don’t see them!

The double-entry accountin system ensures the integrity of business transactions and their financial values. It does this by ensuring that each individual transaction is recorded in at least two different ledger accounts and so implementing a double checking system for every transaction. It does this by first identifying values as either a Debit or a Credit value. A Debit value will always be recorded on the debit side (left hand side) of a ledger account and the credit value will be recorded on the credit side (right hand side) of a ledger account. A ledger has both a Debit (left) side and a Credit (right) side. If the values on the debit side are greater than the value of the credit side of the nominal ledger then that nominal ledger is said to have a debit balance and vice versa.

Luca Pacioli, an Italian monk, was the first to document the system in a mathematics textbook of 1494. Pacioli is often called the “father of accounting” because he was the first to publish a detailed description of the double-entry system, thus enabling others to study and use it

Click on this link for a brief animated tutorial I have put together to explain the workings of double-entry.

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About martinjquinn

I am an accounting academic, accountant and author based near Dublin, Ireland.

One response to “The basics of double-entry accounting.”

  1. Free Financial Statements Analysis says :

    Thanx alot for this valuable information on double entry. Can you provide me with some single entry notes etc as well??

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