Double-entry accounting explained
1 min read
Updated 03 Oct 2026
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AI summary
Every transaction has two equal sides. This is how the books always balance.
4 sections
The idea
Every transaction affects at least two accounts. The total debit always equals the total credit. That is why a Trial Balance can be checked for arithmetic accuracy.
The accounting equation
Assets = Liabilities + Capital
Every entry keeps this equation in balance. Income increases capital; expenses reduce it.
Examples
| Transaction | Debit | Credit |
|---|---|---|
| Owner brings ₹5,00,000 into the bank | Bank | Capital |
| Buy goods on credit for ₹1,00,000 | Purchases | Supplier |
| Sell goods for cash ₹40,000 | Cash | Sales |
| Pay rent ₹20,000 by bank | Rent | Bank |
In Hisab Central
Every voucher you save (Sales, Purchase, Payment, Receipt, Contra, Journal) is posted as a double entry automatically. A voucher can't be saved unless debits equal credits.
If one side of an entry is missing, the books don't balance. If both sides are posted to the wrong accounts, they balance but are still wrong. See Why the Trial Balance matches but the Balance Sheet is wrong.
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