Double-Entry Accounting: The Basics
Accounting 101: Part 1
Every transaction in your general ledger touches at least two accounts — one goes up, and another goes up (or down) to match it. That’s “double-entry” accounting, and once you see it in action a few times, it clicks.
Example 1: Selling a membership
A parent hands you $15 in cash for a PTA membership. In your ledger, that’s one entry with two sides:
| Account | Debit | Credit |
|---|---|---|
| Checking Account | $15.00 | |
| Membership Dues | $15.00 |
Your Checking Account (an asset) went up by $15. Your Membership Dues (an income account) also went up by $15. Same transaction, two accounts, two sides.
Debits and credits
The left column is the debit side, the right column is the credit side. Every entry needs both, and they always have to add up to the same total on each side — that’s what “balancing” the books means. Which side makes an account go up depends on the account:
- Assets and expenses go up with a debit, down with a credit.
- Liabilities, equity, and income go up with a credit, down with a debit.
That’s the whole rule. You don’t need to memorize more than that to follow along.
Example 2: A membership and a shirt
Someone pays $15 for a membership and $20 for a spirit wear T-shirt — $35 total, one check.
| Account | Debit | Credit |
|---|---|---|
| Checking Account | $35.00 | |
| Membership Dues | $15.00 | |
| Spirit Wear Sales | $20.00 |
One debit, split across two credits. The two sides still balance: $35 = $15 + $20.
Example 3: Money that isn’t all yours
Membership dues are a special case: your PTA usually has to pass a portion up to your council, district, state, or national organization. Say $5 of every $15 membership is owed upstream. Until you send that money along, it sits in a liability account — money you’re holding, but don’t get to keep.
| Account | Debit | Credit |
|---|---|---|
| Checking Account | $15.00 | |
| Membership Dues | $10.00 | |
| PTA Pass-Through Dues Payable | $5.00 |
The full $15 hits your checking account. Only $10 is real income to your PTA — the other $5 is recorded as a liability, because you already owe it to someone else.
When you actually write the check to remit those dues:
| Account | Debit | Credit |
|---|---|---|
| PTA Pass-Through Dues Payable | $5.00 | |
| Checking Account | $5.00 |
The liability goes back down to zero (debit), and Checking goes down by the amount you paid out (credit).
Example 4: A check covering two expenses
You write a $50 check to Costco for a mix of party supplies and a teacher appreciation gift — $30 and $20.
| Account | Debit | Credit |
|---|---|---|
| Event Expenses | $30.00 | |
| Staff Appreciation | $20.00 | |
| Checking Account | $50.00 |
Same idea as Example 2, just on the expense side: one credit to Checking, split across two expense accounts on the debit side.
That’s double-entry accounting — every transaction, two sides, always balanced. Next up: what your books look like once a bunch of these entries add up.
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