Double-entry accounting (See Chapter 4 of the Vernimmen) A company’s assets and liabilities must be exactly equal. This is the fundamental principle of double-entry accounting. When an item is purchased, it is either capitalised or expensed. If it is capitalised, it will appear on the asset side of the balance sheet, and if expensed, it will lead to a reduction in earnings and thus shareholders’ equity. The double-entry for this purchase is either a reduction in cash (i.e. a decrease in an asset) or a commitment (i.e. a liability) to the vendor (i.e. an increase in a liability) Double-entry accounting (See Chapter 4 of the Vernimmen) A company’s assets and liabilities must be exactly equal. This is the fundamental principle of double-entry accounting. When an item is purchased, it is either capitalised or expensed. If it is capitalised, it will appear on the asset side of the balance sheet, and if expensed, it will lead to a reduction in earnings and thus shareholders’ equity. The double-entry for this purchase is either a reduction in cash (i.e. a decrease in an asset) or a commitment (i.e. a liability) to the vendor (i.e. an increase in a liability) See all terms in the dictionary of finance To know more about it, look at what we have already written on this subject :

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Definitions of terms begining with the same letter as "Double-entry accounting" :

DAC DCF model DDM DPS DR Data room Dated date Days of finished goods inventory ratio Days of goods held for resale ratio Days of raw material ratio Days of work-in-process ratio Days purchases outstanding Days sales outstanding Days’ inventory ratio Days’ payables ratio Days’ receivables ratio De-rating Debit Debt Debt capital Debt cycle Debt financing Debt securitisation fund Debt security Debt service Debt service Debt service ratio Debt warrant Debtor-friendly bankruptcy process

Decapitalisation Default risk Defeasance Deferred income Deferred redemption period Deferred tax assets Deferred tax assets and liabilities Deferred tax liabilities Deferred taxation Defined benefit plans Defined contribution plans Delisting Delta Demerger Depositary receipt, DR Depreciation Depreciation and amortisation Depreciation ratio Derivative Differed Acquisition Costs Dilution - EPS Dilution - shareholders Dilution loss Dilution of control Dilution profit Direct finance Direct method Direct valuation method Discontinuing operations

Discount rate Discounted average life of all the cash flows of a bond Discounted cash flow model, DCF model Discounted payback period Discounting Discounting factor Discounting of bills of exchange Discounting with recourse Disintermediation Distribution system Diversification Divestiture Dividend Dividend discount model, DDM Dividend per share, DPS Dividend recapitalisation Dividend tax credit Dividend yield Documentary credit Domiciliation Double-entry accounting Dual Track Dual class shares Due diligence Duration Dutch auction Dutch clause