Double Entry for Dummies
noun
pronunciation: 'dəbəl_'ɛntriWhat does Double Entry really mean?
Hey there! So, "double entry" is a term used in accounting to describe a method of recording financial transactions. It's like a balanced equation - every transaction has two equal and opposite effects.
Let's break it down: When a business makes a transaction, like buying supplies or selling goods, it affects at least two accounts. One account gets a positive number and the other gets a negative number. This keeps everything in balance and helps ensure accuracy in the financial records.
Think of it as a seesaw - when you add weight to one side, the other side goes up to keep it balanced. That's the basic idea of double entry. It's like a checks and balances system for accounting.
So, basically, "double entry" means that every transaction is recorded in at least two accounts to make sure everything adds up and stays in balance. It's an important concept in accounting that helps keep track of money coming in and going out. Does that make sense? If you have any more questions, feel free to ask!
Let's break it down: When a business makes a transaction, like buying supplies or selling goods, it affects at least two accounts. One account gets a positive number and the other gets a negative number. This keeps everything in balance and helps ensure accuracy in the financial records.
Think of it as a seesaw - when you add weight to one side, the other side goes up to keep it balanced. That's the basic idea of double entry. It's like a checks and balances system for accounting.
So, basically, "double entry" means that every transaction is recorded in at least two accounts to make sure everything adds up and stays in balance. It's an important concept in accounting that helps keep track of money coming in and going out. Does that make sense? If you have any more questions, feel free to ask!
Revised and Fact checked by James Thompson on 2023-11-14 23:57:49
Double Entry In a sentece
Learn how to use Double Entry inside a sentece
- When you buy something with cash, you decrease your cash account and increase your expense account, which is an example of double entry.
- When you receive payment from a customer, you increase your cash account and decrease your accounts receivable account, which is double entry.
- If you take out a loan, you increase your cash account and increase your liability account, showing the double entry effect.
- When you pay off a loan, you decrease your cash account and decrease your liability account, demonstrating the double entry principle.
- If you purchase inventory on credit, you increase your inventory account and increase your accounts payable account, which is an example of double entry.
Double Entry Synonyms
Words that can be interchanged for the original word in the same context.
Double Entry Hypernyms
Words that are more generic than the original word.