Double Entry Bookkeeping

Definition

The accounting system where every transaction affects at least two accounts (a debit and a credit), ensuring the fundamental accounting equation always balances. It's elegant, logical, and has been fooling people for 600 years.

Example Usage

Double entry bookkeeping means when you record a sale, you increase revenue (credit) and either increase cash or AR (debit).

Origin

Developed in Italy in the 1400s by merchants; formalized by Luca Pacioli in 1494

Fun Fact

Double entry bookkeeping is so fundamental to modern accounting that single-entry systems are barely recognized as legitimate

Source: Accounting Foundations (Luca Pacioli)

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