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by tsmith 4421 days ago
Excellent write-up, but having taken Corporate Accounting courses the "triple-entry bookkeeping" moniker tripped me up a bit - it's an inaccurate metaphor (see http://en.wikipedia.org/wiki/Double-entry_bookkeeping_system to understand why).
2 comments

Curious, could you elaborate? The wiki page is long, not sure what I'm looking for... It seems like "triple-entry" is often used alongside "momentum accounting", but its not clear to me why they are conflated. Disclaimer: I'm no accountant, so the simple terms are good. :)
In the OP, double-entry accounting is taken to mean that the two parties to a transaction each keep a record of it (and by extension triple-entry accounting is if three parties keep a record of it). This is a mis-use of the term "double-entry accounting" to mean "two-party recordkeeping".

Double-entry accounting means that for each transaction, there will be two (sometimes more) entries in the ledger (set of accounts) - one on the "credit" side, and one on the "debit" side. For example, when you withdraw $100 from your bank account, from the bank's perspective it is crediting an Asset (Cash) and debiting a Liability (Customer Accounts), so a credit entry of $100 would go into the Cash "account" and a debit entry of $100 would go into the Customer Accounts "account".

Triple-entry accounting implies that a third entry would go... somewhere else in the ledger; but OP isn't describing a classic set-of-accounts ledger.

double-entry means the transaction cancels out at both ends. The result is a transaction of 0. Triple-entry is meaningless.

atm-withdrawal + cash $100 - bankaccount $100

fyi comrade your hellbanned
Uhh, I was just trying to let comrade1 know that all of his comments were appearing dead. It seems to have been fixed now though.

I guess that is somehow deserving of downvotes...

Triple-entry is the technical term for this type of book keeping.