double entry

Definition

The foundational accounting system where every transaction affects at least two accounts, ensuring the books always balance through equal and opposite entries. It's the yin and yang of accounting, except with more debits.

Example Usage

Thanks to double entry bookkeeping, we can trace how a simple purchase affects both cash and inventory accounts simultaneously.

Origin

Developed by Italian mathematician Luca Pacioli in 1494, documented in 'Summa de arithmetica'

Fun Fact

Double-entry bookkeeping is considered one of the greatest business innovations ever—Goethe called it 'one of the finest discoveries of the human intellect,' which seems excessive but accountants take what they can get.

Source: Fundamental accounting principles

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contra account

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