[jldugger]

> And yet like all previous endorsements I've heard, I've not been able to take away why it is so important.

Double entry accounting is basically a shorthand for the Fundamental Equation of Accounting:

Income - Expenses = (Assets - Liabilities) + Equity.

We call it "double entry" accounting because within the constraints of that equation you cannot adjust one account without also adjusting at least one other account. It applies equally to the books as a whole as it does to the individual transactions, so you can validate one by validating the other. So at data entry time, you can be relatively sure that you did the right thing because the transactions balance. And later, when your bank statements come in, you can easily reconcile because you have them broken out by account already -- and given the double entry system was already in balance, we know that any mistake you detect at this stage likely means a mistake in another account!

It also serves to disambiguate certain transactions. One example would be a cash advance from a credit card. In a single entry system, I don't have sufficient metadata to determine whether that is income, or a liability that needs to be repaid. In a double entry accounting system, I can simply check the source of that credit and see "ah, this came from a liability account".

If it helps, you can think of it as a complicated form of transaction tagging, with some mathematical constraints on the sum of tags in any transaction.

[wrycoder]

It's usually expressed as

Assets + Expense = Liabilities + Equity + Income

The two accounts on the left normally carry a debit balance, and three on the right normally carry a credit balance.

At the end of the accounting period, subtract the Expense balance from both sides of the equation, and close out (Income - Expense) into Equity, i.e. if that was positive, Equity increases.

Or, in a computerized system,

Assets + Expense - Liabilities - Equity - Income = 0