Double-entry bookkeeping

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Double-entry bookkeeping

Accounting method that records each transaction as both a credit and a debit in different accounts.

Double-Entry Bookkeeping

A system of accounting where every transaction is recorded as a debit to one account and a credit to another. That is, one who uses a double-entry bookkeeping system records each transaction twice, such that each credit (representing revenue) is recorded as a credit to one's capital account and as a debit on one's bank account. For example, if a company sells a product for $100, it adds $100 to its capital account and subtracts $100 to its bank account. One way of conceptualizing the bank account is from the bank's perspective: the debits are debits because any asset in a bank account represents a liability for the bank; this is why they are subtracted instead of added. However, the data are recorded twice to prevent errors in bookkeeping: the total debits and credits recorded should add to zero.
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In addition, there is an over-statement of the role of double entry bookkeeping in national accounting prior to relatively modem times that is, as with these errors and misunderstandings, irritatingly misleading.
There is a dissonance in Professor Soll's view of the role of double entry bookkeeping, not just because he does not appear to understand what it is or how it works, but because he has failed to engage with the extensive academic arguments on its role.
As a result, while the core message concerning the importance of taking a reckoning is undeniably valid, the material on double entry bookkeeping is, for the reasons outlined above, fundamentally flawed, misleading, and unconvincing and that for me, as I indicated above, casts doubt on how much I should trust the rest of this book.
He was comparing merchants' double entry bookkeeping with the records kept by the Prince's officials concerning his financial affairs.
Double entry bookkeeping and the probative value of accounts
1] in the context of the use of the so-called Italian system of double entry bookkeeping (italics added):
This paper considers the role of Pacioli's Ricordaze, of the records that may be maintained within it, discusses the merits of maintaining a record book of this type, and questions why such a clearly useful device does not appear to have been adopted even though it was described in the same treatise which led to the universal adoption of double entry bookkeeping.
A number of early confirmed instances of its use have been identified, including its adoption by, for example, the Datini of Prato during the 1380s [De Roover, 1937, 1938]; and it is now generally accepted that double entry bookkeeping emerged by the end of the 13th century [Lee, 1977; Smith, 2008].
During the era which followed and lasted from around 1300 until 1800, the era of the sedentary merchants, the mercantile age, double entry bookkeeping emerged and, ultimately, became widely adopted.
Many authors have speculated on what gave rise to the emergence of double entry bookkeeping and have suggested a number of contributory, factors, including population growth, expansion of trade, the acceptance of credit, educational advances in medieval universities, the growth in the use of agents, joint ventures, partnerships, the switch to a monetary economy, and the increased stability of currency in 13th century Venice (e.
1997), "Transportation of Double Entry Bookkeeping to Early New South Wales," Accounting History, NS, Vol.
What may be inferred reflects Nobes' personal opinions and understanding of the history of double entry bookkeeping.