double-entry bookkeeping

Meaning

An accounting system where every financial transaction is recorded in at least two accounts, as a debit and a corresponding credit. This system ensures that the accounting equation (Assets = Liabilities + Equity) always remains balanced.

Examples

• We transitioned from a simple spreadsheet to double-entry bookkeeping to prepare for our upcoming audit.

  We transitioned from a simple spreadsheet to double-entry bookkeeping to prepare for our upcoming audit.

• Double-entry bookkeeping is the foundation of modern accounting and financial reporting.

  Double-entry bookkeeping is the foundation of modern accounting and financial reporting.

• Every transaction recorded under double-entry bookkeeping must have equal debit and credit entries.

  Every transaction recorded under double-entry bookkeeping must have equal debit and credit entries.

• Our new accountant spent the morning reconciling errors in the double-entry bookkeeping ledger.

  Our new accountant spent the morning reconciling errors in the double-entry bookkeeping ledger.

• Without double-entry bookkeeping, it is incredibly difficult to track complex corporate cash flows.

  Without double-entry bookkeeping, it is incredibly difficult to track complex corporate cash flows.

Common Mistakes

• ✗ We do double bookkeeping to save money.

  ✓ We use double-entry bookkeeping to track our finances.

  'Double bookkeeping' or keeping 'double books' often implies illegal, fraudulent accounting. The correct, standard technical term is 'double-entry bookkeeping'.

• ✗ He made a double-entry bookkeeping in the ledger.

  ✓ He made a double-entry transaction in the ledger.

  'Bookkeeping' refers to the overall system or process, not an individual entry or transaction.

Related Expressions

Practice

• To ensure accuracy, all modern corporate accounts are managed using ________.

  💡 The standard two-sided accounting system.

  Show answer

  double-entry bookkeeping

• If you want to pass the accounting exam, you must master the principles of ________.

  💡 The system of recording debits and credits.

  Show answer

  double-entry bookkeeping