2 min read
Definition
Double-entry bookkeeping records each transaction as equal debits and credits across at least two accounts, so total debits always equal total credits. It is the foundation of the trial balance and every financial statement.
In plain terms
Buy £1,000 of stock on credit: stock goes up £1,000, and payables goes up £1,000. Both sides move, and the books stay in balance.
Why it matters for your company
Because it is self-balancing, double entry catches many errors automatically and produces the reliable balance sheet and P&L that lenders and HMRC expect.
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