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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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Some have asserted the with the advent of computerized information systems, double entry accounting as we know it is no longer relevant.
Despite these criticisms, double entry accounting remains relevant today for a number of reasons, as follows.
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He asked the universities to build the capacity to teach adoption of double entry accounting system.
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Medici's bank needed modern accounting tools and techniques to measure and allocate profits to multiple partners, which lead to the double entry accounting process we use today.
Double entry accounting was invented during the Italian renaissance, by Venice merchants drawing on ideas from Eastern and Western mathematical systems.
ISLAMABAD, July 01, 2010 (Balochistan Times): To ensure transparency in its accounts books and strengthen financial management and reporting, the Capital Development Authority has launched a project of automated double entry accounting system.