Word: Double Entry
Definition:Double entry is a method used in accounting where every financial transaction is recorded in two accounts: one account is debited (which means to add money or value) and the other account is credited (which means to subtract money or value). This system helps keep financial records accurate and balanced.
Usage Instructions: - Double entry is mainly used in bookkeeping and accounting. - When recording a transaction, you always make sure that the total amount debited equals the total amount credited.
Example:Imagine you buy a computer for your business. You spend $1,000. In double entry accounting: - You would debit your "Office Equipment" account by $1,000 (adding value to your assets). - You would credit your "Cash" account by $1,000 (subtracting from your cash).
Advanced Usage: - Double entry accounting is essential for preparing financial statements like the balance sheet and income statement. It helps ensure that the accounting equation (Assets = Liabilities + Equity) stays balanced.
Word Variants: - Double-entry system: Refers to the overall system of accounting that uses double entry. - Double-entry bookkeeping: The practice of recording transactions using the double entry method.
Different Meanings: In a broader context, "double entry" can also refer to: - A method of recording in other fields, such as project management, where you track inputs and outputs similarly.
Synonyms: - Dual entry - Two-fold entry
Idioms and Phrasal Verbs:There are no specific idioms or phrasal verbs directly associated with "double entry", but you may encounter phrases related to accounting practices, such as "balance the books" (to ensure that financial records are accurate and all entries are properly accounted for).
Summary:Double entry is a fundamental concept in accounting that ensures every transaction is recorded twice, once as a debit and once as a credit. This helps maintain accuracy and balance in financial records.