I must be misunderstanding something when trying to research this topic because I genuinely do not understand to point of DE bookkeeping?
To me, DE shows the exact same information that single entry bookkeeping does. In single entry you have Debit (an expense) or Credit (an income) and for each purchase or income you write a single line with how much money is involved, and that number gets added or subtracted from the balance.
But from what I can tell, in DE bookkeeping, you write the exact same thing, but then you have a second line with the exact same amount in the other column. So for example if you make a purchase of $500 for books, in one line you write “Books | Debit: $500 | Balance: $XXXX” and then in a line immediately underneath it you write “Books | Credit: $500 | Balance: $XXXX” which all can be summarized in single-entry by saying “Books | -$500 | Balance: $XXXX”?
So other than maybe proof reading by “balancing the books” to make sure both columns add up to the same amount, I can’t or don’t understand if there’s any actual difference? Can anyone help?
In: Economics
Another reason not mentioned here yet. In single accounting, you may know that you bought books for 500 and its fairly easy for you to keep track of those books but in a big company, many people need to look at the balance and be able to reconstruct how much there is of what, sometimes people that dont even belong to the company like inspectors. They wouldnt be able to figure out if you still have those books, lost them or sold them but forgot taking note.
With double accounting, the person looking at it can immediatly see that you have $500 worth of books
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