Double entry bookkeeping is a system of accounting where every financial transaction is recorded with a corresponding negative and positive entry, know as ‘debits’ and ‘credits’.
A debit in one account will be offset by a credit in another account, and therefore the balance of all debits should be exactly the same as the balance of all the credits.
If a business received earnings of £75, the double entry would be;
Debit entry of £75 to the Bank/Cash account and a credit entry of £75 to the Income account.
The double entry system of bookkeeping makes it easier to prepare financial statements and detects any errors made.