What is double entry accounting? Double entry accounting or double entry bookkeeping can be explained in several ways. Perhaps the easiest way to explain double entry accounting is to say that every debit needs a credit.

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0:33 Double entry accounting example
0:56 Complex journal entries
1:52 Double entry accounting and the accounting equation
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3:16 Double entry accounting income statement balance sheet

When making accounting journal entries, the debits go on the left and the credits go on the right. Another way of describing double entry accounting is: both sides of the journal entry need to be recorded. As a lot of journal entries simply have one debit and one credit, in most cases this is a correct statement. Technically speaking, “The sum of the debit entries needs to equal the sum of the credit entries” would be a better way of describing double entry accounting.

Here are some more ways of describing double entry accounting. There are always two (or more) entries for every transaction. Every business transaction will involve two accounts (or more). Always comply with the accounting equation: Assets = Liabilities + Equity.

Philip de Vroe (The Finance Storyteller) aims to make strategy, finance and leadership enjoyable and easier to understand. Learn the business and #accounting vocabulary to join the conversation with your CEO at your company. Understand how financial statements work in order to make better stock market investment decisions. Philip delivers #financetraining in various formats: YouTube videos, classroom sessions, webinars, and business simulations. Connect with me through Linked In!

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