Double Entry Accounting Double Entry Accounting Overview Double entry accountingis a record keeping system under which every transactionis recorded in at least two accounts; there is no limit on the number of accounts used in a transaction, but the minimum is two accounts.There are two columns in each account, with debitentries on the left and creditentries on the right. In double entry accounting, the total of all debit entries must match the totalof all credit entries. When this happens, the transaction is said it be "in balance." If the totals do not agree, the transaction is said to be "out of balance," and you will not be able to use the resulting information to create financial statements. Double Entry Accounting Definitions The definitions of a debit and credit are: *.Adebitis an accounting entry that either increases an assetor expenseaccount, or decreases a liabilityor equityaccount. It is positioned to the left in an accounting entry. *.Acreditis an accounting entry that either increases a liabilityor equityaccount, or decreases an assetor expenseaccount. It is positioned to the right in an accounting entry. Anaccountis a separate, detailed record associated with a specific asset, liability, equity, revenue, expense, gain, or loss. Examples of accounts are: *. Cash(asset account: normally a debit balance) *. Accounts receivable(asset account: normally a debit balance) *. Inventory(asset account: normally a debit balance) *. Fixed assets(asset account: normally a debit balance) *. Accounts payable(liability account: normally a credit balance) *.Accrued liabilities (liability account: normally a credit balance) *.Notes payable (liability account: normally a credit balance) *. Common stock(equity account: normally a credit balance) *. Retained earnings(equity account: normally a credit balance) *. Revenue- products (revenue account: normally a credit balance) *.Revenue - services (revenue account: normally a credit balance) *. Cost of goods sold(expense account: normally a debit balance) *. Wageexpense (expense account: normally a debit balance) *.Utilities (expense account: normally a debit balance) *.Travel and entertainment (expense account: normally a debit balance) *. Gainon sale of asset (gain account: normally a credit balance) *. Losson sale of asset (loss account: normally a debit balance)