Small Business Dictionary

Dual Entry Accounting

In Dual Entry Accounting, also known as Double-Entry Accounting, every financial transaction is recorded twice on a Balance Sheet, using the formula Assets = Liabilities + Shareholder's Equity. Transactions are entered twice in order to help detect errors by confirming both sides of the formula match. For example, borrowing $10,000 for your business would increase Cash (an asset) by $10,000 as well as Loans (a liability) by $10,000.