You need to acknowledge both sides of each transaction, and reflect it in your books. And of course you have to make an extra entry to do that – hence double-entry bookkeeping.
Are there always two entries?
Double-entry bookkeeping gets its name because there are at least two entries for every transaction. There may be more. For example, a sale may:
create a tax liability on the GST you collected
And it can get bigger than that. The more complex the transaction, the more entries there are.
How to do double-entry bookkeeping
Double-entry bookkeeping aims to track all the knock-on effects of a business transaction and reflect them in your business accounts. But what does that mean on a practical level?
To get a sense for it, you need to understand a little about: