Double-Entry Bookkeeping and Journal Entries

Double-entry bookkeeping means every transaction affects at least two accounts. When you receive rent payment, your bank balance goes up (debit) and your revenue goes up (credit). The two sides always balance — that's how you know your books are correct.

Debits and credits

This is where most people get confused. Debits and credits don't mean "subtract" and "add" — their effect depends on the account type:

• Assets and Expenses increase with debits, decrease with credits
• Liabilities, Equity, and Revenue increase with credits, decrease with debits

Creating entries in Twin Owls

On the Transactions page, each journal entry has one or more lines. Each line specifies an account and either a debit or credit amount. The total debits must equal total credits — Twin Owls enforces this before you can save.

You can create entries as drafts first, then review and post them. Posted entries appear on your financial reports. Draft entries do not.

Common entry patterns

Most day-to-day entries follow a handful of patterns: revenue received (debit bank, credit revenue), expense paid (debit expense, credit bank), and transfers between accounts (debit destination, credit source). Once you recognize these patterns, bookkeeping becomes routine.