Double-entry bookkeeping
In one sentenceThe principle that every transaction is recorded in at least two accounts, one debited and one credited, with equal amounts so that the books stay balanced.
Simply put
Every transaction has two sides: what came in and what went out, or what increased and what offsets it. Double entry records both sides together, so the effect of no transaction is lost.
Because debits equal credits in every entry, their totals are equal in the trial balance, and the accounting equation stays true.
Worked example
A factory bought equipment for 30,000 SAR, paying half in cash and the rest on credit to the supplier.
Dr: Equipment (debit)30,000
Cr: Bank (credit)15,000
Cr: Suppliers (credit)15,000
Total debits = Total credits (15,000 + 15,000)30,000 SAR
Don't confuse it with
Compound journal entryAn entry with more than two accounts; it is an application of double entry, not an alternative to it.