example of double entry bookkeeping

An example of double-entry bookkeeping demonstrates how every financial transaction impacts at least two accounts: one account is debited, and the other is credited. This method ensures the accounting equation (Assets = Liabilities + Equity) remains balanced. For instance, when a business purchases office supplies with cash, the office supplies account is debited (increased), and the cash account is credited (decreased). Double-entry bookkeeping helps businesses maintain accurate financial records, track assets and liabilities, and ensure financial statements are error-free, providing a solid foundation for decision-making and reporting.