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Double-entry Bookkeeping

Defining the Process of Double-Entry Bookkeeping

Under this method, every transaction is registered in two ledger accounts: one on the credit side (positive) and one on the debit side (negative). The total balance of all the ledger accounts is always 0. For example, a company that buys wood for $1,000 in cash will credit the cash ledger account for $1,000 and debit the wood purchases ledger account for the same sum.

Double-entry bookkeeping is a commonly accepted method of registering a company’s business transactions.