{"id":1353,"date":"2021-02-25T15:55:00","date_gmt":"2021-02-25T15:55:00","guid":{"rendered":"http:\/\/localhost\/construction\/?p=64"},"modified":"2023-06-09T12:05:56","modified_gmt":"2023-06-09T12:05:56","slug":"double-entry","status":"publish","type":"post","link":"https:\/\/development.zerosoft.in\/eliteactax.com\/double-entry\/","title":{"rendered":"Bookkeeping 101: What is Double-Entry?"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"1353\" class=\"elementor elementor-1353\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-52f3fb7c elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"52f3fb7c\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-74cb849c\" data-id=\"74cb849c\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-2594d6b2 elementor-widget elementor-widget-text-editor\" data-id=\"2594d6b2\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Double-entry bookkeeping is a system of bookkeeping that provides a more detailed view of your financial transactions at a glance.\u00a0<\/p><p>For those new to bookkeeping, double-entry bookkeeping can seem complex. We\u2019ll break down what you need to know about it, how it works, and how it differs from single-entry bookkeeping.\u00a0<\/p><h2>What is Double-Entry Bookkeeping?<\/h2><p>Double-entry bookkeeping is a bookkeeping method. Like single-entry bookkeeping, the goal of double-entry bookkeeping is to have your books balanced.\u00a0<\/p><p>Debits will:\u00a0<\/p><ul><li>Decrease liabilities and owner\u2019s equity on balance sheets<\/li><li>Increase assets on balance sheets<\/li><li>Increase expense accounts on an income statement<\/li><\/ul><p>Credits will:\u00a0<\/p><ul><li>Decrease assets on balance sheets<\/li><li>Increase liabilities and owner\u2019s equity on balance sheets<\/li><li>Increase revenue on an income statement<\/li><li><p>The chart of accounts affects credits and debits in the following ways:<\/p><ul><li>Assets: Increase debit; Decrease credit<\/li><li>Liabilities: Increase credit; Decrease debit<\/li><li>Equity: Increase credit; Decrease debit<\/li><li>Revenue: Increase credit, Decrease debit<\/li><li>Expenses: Increase debit, increase credit<\/li><\/ul><p>On an income statement, debits increase balances in expenses and loss accounts. Credits will decrease those balances. Debits will decrease revenue, while credits increase the revenue balance.<\/p><p>Every transaction that your business makes will require one debit and one credit. There is no limit to the number of transactions that can use credits or debits.<\/p><p>Double-entry bookkeeping must also follow this\u00a0<a href=\"https:\/\/www.investopedia.com\/terms\/a\/accounting-equation.asp\">equation<\/a>: Assets = Liabilities + Equity.\u00a0<\/p><p>Assets include:\u00a0<\/p><ul><li>Cash<\/li><li>Cash equivalents<\/li><li>Liquid assets (certificates of deposit or Treasury bills)<\/li><li>Inventory<\/li><\/ul><p>Liabilities include:\u00a0<\/p><ul><li>Debt<\/li><li>Dividends payable<\/li><li>Long-term debt<\/li><li>Rent<\/li><li>Salaries<\/li><li>Taxes<\/li><li>Utilities<\/li><\/ul><p>Equity, or shareholders\u2019 equity, is the company\u2019s total assets minus its liabilities. This is the equivalent of the money that shareholders would receive if assets were liquidated and debts were paid.<\/p><p>Companies can also have retained earnings. Retained earnings are part of shareholders\u2019 equity. These earnings are equal to the percentage of net earrings unpaid to shareholders as dividends.\u00a0<\/p><h2>How is it Different than Single-Entry?<\/h2><p>In double-entry bookkeeping, each account has two columns per transaction, and each transaction is in two accounts: debit and credit. Single-entry only requires one entry per transaction, one that can affect either expenses or revenue.\u00a0<\/p><p>Double-entry bookkeeping accounts list accounts for assets, expenses, income, and liability. On the other hand, single-entry bookkeeping only lists expenses and income.<\/p><p>Double-entry bookkeeping also allows you to monitor multiple accounts. This can help you manage a larger business. All of your company\u2019s financial activities will appear in one place, and transactions will have easy to find descriptions.\u00a0<\/p><p>Finally, double-entry bookkeeping contains more detailed information about your financial transactions. You\u2019ll examine your equity, losses, and profits instead of only profits and losses like single-entry bookkeeping.<\/p><\/li><\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Double-entry bookkeeping is a system of bookkeeping that provides a more detailed view of your financial transactions at a glance. For those new to bookkeeping, double-entry bookkeeping can seem complex. We\u2019ll break down what you need to know about it, how it works, and how it differs from single-entry bookkeeping. What is Double-Entry Bookkeeping? Double-entry [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":3590,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[56,70,60,73,64,59,57,69,63,71,68,58,61,62,74,67,66,65,72],"class_list":["post-1353","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-accountants-near-me-for-personal-taxes","tag-accounting-and-tax-services","tag-business-tax-accountant","tag-cpa-tax-accountant","tag-crypto-tax-accountant","tag-estate-tax-accountants-near-me","tag-financial-advisor-tax-accountant-near-me","tag-international-tax-accountant","tag-medical-tax-accountants-near-me","tag-personal-tax-accountants-near-me","tag-real-estate-tax-accountant","tag-real-estate-tax-accountants-near-me","tag-small-business-tax-accountant","tag-small-business-tax-accountants-near-me","tag-tax-accountant","tag-tax-accountant-cpa","tag-tax-accounting-services","tag-tax-and-accounting-services","tag-taxation-accountants-near-me"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Bookkeeping 101: What is Double-Entry?<\/title>\n<meta name=\"description\" content=\"Double-entry bookkeeping is a system of bookkeeping that provides a more detailed view of your financial transactions at a glance.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/development.zerosoft.in\/eliteactax.com\/double-entry\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bookkeeping 101: What is Double-Entry?\" \/>\n<meta property=\"og:description\" content=\"Double-entry bookkeeping is a system of bookkeeping that provides a more detailed view of your financial transactions at a glance.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/development.zerosoft.in\/eliteactax.com\/double-entry\/\" \/>\n<meta property=\"og:site_name\" content=\"Elite Accounting &amp; 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