Double entry
Also called: Double-entry bookkeeping
What is double entry?
Double entry means every transaction is posted twice.
It is posted once on the debit side of one account, and once on the credit side of another.
The two amounts always match, so total debits always equal total credits.
Example
A bakery buys flour for £260.00 and pays from the bank. Purchases is debited with £260.00 and Bank is credited with £260.00.
Why it matters
Because debits always equal credits, a trial balance can check the books. An entry with only one side posted stops it agreeing.
Practise it
Module, 5 rooms, all freeDouble entry from zero
Practise it nowDebit and credit
Ledger Drill is practice, not tax or accounting advice. If this looks wrong, tell us at [email protected].