Ancient accountants used clay tokens to keep track of livestock and grain before an uniform numbering system was developed. Isn't it insane? In accounting, double-entry bookkeeping is a method of bookkeeping in which each entry to one account requires an equal and opposing input to another account. The debit and credit sides of the double-entry system are equal and corresponding. In double-entry accounting, a transaction always impacts at least two accounts, always has at least one debit and at least one credit, and always has equal total debits and total credits. For example, if a company takes out a $10,000 bank loan, it must debit $10,000 from an asset account named "Cash" and credit $10,000 from a liability account called "Notes Payable" to record the transaction. The accounting equation is balanced in double-entry bookkeeping. The accounting equation is used to detect errors; if the sum of debits for all accounts does not equal the equivalent amount of credits for all accounts at any moment, there has been a mistake. The ledger may still "balance" even if the wrong ledger accounts have been debited or credited if the equation is satisfied.

Vikrant Ojha

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