Double-Entry Bookkeeping
Definition
Double-entry bookkeeping means every transaction affects at least two accounts, and total debits always equal total credits. This keeps the books balanced.
Example
A business buys $200 of supplies with cash. Cash decreases $200 (credit) and Supplies Expense increases $200 (debit). The entry is balanced.
Why It Matters
Double-entry bookkeeping is the system that keeps the accounting equation true. If debits and credits do not match, the entry is wrong.