---
title: "Double-entry bookkeeping"
description: "What is double-entry bookkeeping? Every transaction recorded in two or more accounts with equal debits and credits. Learn how it works, with a trading example."
url: https://1flux.ai/glossary/double-entry-bookkeeping
last_updated: 2026-10-10
---

[Accounting](https://1flux.ai/glossary#accounting)

# Double-entry bookkeeping

What is double-entry bookkeeping, and why do the books always balance?

Glossary Updated 10 October 2026

Definition

Double-entry bookkeeping is the accounting system in which every transaction is recorded in at least two accounts, with equal debits and credits, so the books always balance.

## What is double-entry bookkeeping in practice?

It reflects that every transaction has two sides: buying stock on credit increases inventory and increases what you owe. Debits increase assets and expenses; credits increase liabilities, equity and income. Because each entry balances, the accounting equation (assets = liabilities + equity) always holds, and errors are easier to find.

Buying goods on credit

Example

- Dr Inventory

  USD 9,000

- Cr Accounts payable

  USD 9,000

Debits equal credits

USD 9,000

Inventory (an asset) and accounts payable (a liability) both rise by the same amount.

Single-entry records, such as a cash book kept in a spreadsheet, can’t show the full financial position. Each balanced record is a [journal entry](https://1flux.ai/glossary/journal-entry), summed up in the [trial balance](https://1flux.ai/glossary/trial-balance).

In 1flux

Each legal entity keeps its own double-entry books. Every posting is checked to balance before it’s accepted, and posted lines can’t be changed. [See 1flux Accounting](https://1flux.ai/products/accounting)

Related

## Keep exploring

### [Journal entry](https://1flux.ai/glossary/journal-entry)

A dated record of a transaction as balancing debits and credits.

### [General ledger](https://1flux.ai/glossary/general-ledger)

The complete record of every account and its balance.

### [Trial balance](https://1flux.ai/glossary/trial-balance)

Every account's balance, checked so debits equal credits.

### [1flux Accounting](https://1flux.ai/products/accounting)

Books that keep themselves: every receipt, delivery, invoice and payment posts its own journal.

Last updated 10 October 2026