DOUBLE ENTRY Meaning and
Definition
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Double entry is an accounting concept or system whereby every financial transaction is recorded, analyzed, and classified using at least two different accounts or categories. It is based on the principle that every transaction has two effects: a debit entry and a corresponding credit entry, which ensures that the accounting equation "assets = liabilities + equity" remains in balance.
In double entry accounting, each entry affects a minimum of two accounts, with one account receiving a debit and the other receiving a credit. The debit entry represents an increase in assets or expenses, or a decrease in liabilities or equity, while the credit entry represents an increase in liabilities or equity, or a decrease in assets or expenses. This dual-entry system provides a comprehensive and accurate record of financial transactions and their impact on a company's financial position.
Double entry accounting has several advantages. It supports the accurate calculation of profitability, aids in identifying errors, enables the creation of financial statements, and provides a detailed record of financial transactions that facilitates analysis and decision-making. Furthermore, the double entry system provides a strong control mechanism by ensuring that for every debit entry, there is an equal and opposite credit entry, reducing the risk of fraud or misrepresentation.
Overall, double entry is a fundamental principle in accounting that ensures accuracy, reliability, and consistency in recording and reporting financial transactions, thereby providing a solid foundation for financial analysis and decision-making in organizations.
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In book-keeping, an entry on both Dr. and Cr. side for each transaction.
Etymological and pronouncing dictionary of the English language. By Stormonth, James, Phelp, P. H. Published 1874.
Common Misspellings for DOUBLE ENTRY
- souble entry
- xouble entry
- couble entry
- fouble entry
- rouble entry
- eouble entry
- diuble entry
- dkuble entry
- dluble entry
- dpuble entry
- d0uble entry
- d9uble entry
- doyble entry
- dohble entry
- dojble entry
- doible entry
- do8ble entry
- do7ble entry
- douvle entry
Etymology of DOUBLE ENTRY
The word "double entry" originates from the field of accounting and bookkeeping, specifically from the Italian accounting method known as "Partita Doppia", which was developed during the Renaissance. The Italian term "partita" means "part" or "entry", while "doppia" translates to "double". This method was first documented in a book called "Summa de arithmetica, geometria, proportioni et proportionalità" published by Luca Pacioli in 1494. The term "double entry" refers to the practice of recording financial transactions in two corresponding accounts, where a debit entry in one account is balanced by a credit entry in another, hence the concept of "double" entry. Over time, this method became widely adopted worldwide, and the term "double entry" entered the English language to describe this system of accounting.
Similar spelling words for DOUBLE ENTRY
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