Double-Entry Bookkeeping
Definition
The system where every transaction is recorded in at least two accounts, with equal debits and credits, so the books always balance.
Want a deeper explanation?
Formula
Total Debits = Total CreditsDouble-entry is what lets accounting catch its own mistakes and what makes a balance sheet possible. Modern software handles the mechanics, but every entry still follows this rule underneath.
It is also why money can not simply "disappear" from good books. Watch for: one-sided fixes made directly to reports or spreadsheets, which break the link between the P&L and the balance sheet.
Example
Buying $10,000 of inventory on credit increases inventory (debit $10,000) and increases accounts payable (credit $10,000).