Double-entry accounting

What is double-entry accounting?

Double-entry accounting records every transaction in at least two accounts, one debit and one matching credit, so the books always stay in balance. Buy a $10K laptop fleet with cash, and cash drops while equipment rises by the same amount. This built-in cross-check is why double-entry is the standard for reliable financial statements.

Why it matters for fast-growing companies

Double-entry is what makes your financials auditable and catchable, errors surface as an out-of-balance ledger instead of hiding. Single-entry (a checkbook register) can't produce a real balance sheet, so any company raising capital, taking on debt, or preparing for a review needs double-entry books.

Related terms

• Accounting & closeAccounting equationThe accounting equation states that a company's assets always equal its liabilities plus owner's equity.
• Accounting & closeJournal entryA journal entry is the record of a single business transaction, listing the accounts affected and the debits and credits that keep them balanced.
• Accounting & closeGeneral ledgerThe general ledger is the master record of every financial transaction a company makes, organized by account, cash, revenue, payroll, and so on.
• Accounting & closeTrial balanceA trial balance is a report that lists every account in the general ledger with its ending debit or credit balance, then totals each column.

Frequently asked questions