Study Guide - 1-1

Why do we have double- entry accounting? Why do we put everything in twice? Why not just once?

Double-entry accounting is the practice of entering the same information into two separate books, a journal and a ledger. A journal contains the daily transactions of a firm whereas the ledger records the same information but in individual accounts, so as to keep track of assets, liabilities, equity, revenue and expenses.
Double-entry accounting was founded more than 500 years ago and was used as a way to view the financial realities of a firm. We enter the same information so we can see it in a different context. Its one thing to see your firm's daily transactions, however you also need to be able to see the assets, liabilities, equity, revenue and expenses as debits and credits.