Accounting

Double-entry bookkeeping

Double-entry bookkeeping is the accounting principle where every transaction is recorded in at least two accounts, so total debits always equal total credits.

Applied to personal finances, it guarantees money never appears or disappears out of nowhere: a transfer leaves one account and enters another, and a purchase reduces cash while recording an expense.

It's what keeps net worth reconciled with real balances and surfaces data-entry errors as an imbalance instead of letting them accumulate silently.

Example

Paying a $900 mortgage instalment is recorded as $650 reducing the liability, $250 of interest expense, and $900 leaving the current account.

Related terms

Asset — An asset is anything of economic value you own: cash, investments, real estate, vehicles or loans made to others.
Liability — A liability is an outstanding payment obligation: a mortgage, personal loan, consumer credit, card balance or debt owed to someone else.
Bank reconciliation — Reconciliation is checking that the balance recorded in your system matches the actual balance of the account at the bank.

Bring it to your own numbers

netclariq applies these concepts to your real accounts, debts and investments, with simplified double-entry bookkeeping and without asking for your bank credentials.

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Educational content. netclariq does not provide financial, investment, tax or legal advice.