Double-entry Bookkeeping


Double-entry bookkeeping is a standard set of rules that are used when businesses record financial information. This set of rules is based on the accounting equation:

» Assets = Liabilities + Equity

For this equation to hold true, a change in one account must be matched (offset) by an identical change in another account. These changes are referred to as Debits and Credits. These debits and credits must be equal for a transaction to be valid.

Shepherd’s Staff has been programmed to work off a T-account chart based off of these rules of accounting.


Account Type Increases Decreases
1 - Asset Debit Credit
2 - Liability Credit Debit
3 - Equity Credit Debit
5 - Income Credit Debit
6 - Expense Debit Credit
7 - Dedicated Credit Debit


One of the main ideas to grab onto is the fact that when money comes into or leaves the asset account, it must be offset in another account.

For example, when the church receives offerings, that money goes into the bank account. When you record this transaction in an asset account, we see on the chart that we will debit that asset account in order to increase it. Now we need to match the credit side of the account.

Since we need to increase an account by a credit we see that our options are liability, equity, income, or dedicated. Depending on the purpose of the money you can make your choice. If the offerings were just from the general offering plate, they will be recorded as income. If the offerings were from a memorial, they will probably be placed in a dedicated account depending on the instructions.

Either way, at the end of that transaction, the amount you increase the asset by will match the amount you increase the offset account.