Isaac Newton and Double-Entry Bookkeeping

Newton's third law is as follows: For a force there is always an equal and opposite reaction: or the forces of two bodies on each other are always equal and are directed in opposite directions.

A lot of students have trouble with this concept, including me. If I give my office chair a shove and it simultaneously shoves me back with equal and opposite force, then why does it roll all the way across the office and I stay still? The third law wasn't clearly explained to me until I was a junior in college. The point is that pairs of opposite forces will always add up to zero, but all the forces acting on one object don't necessarily. When I push my chair, I don't go spinning off in the opposite direction because I've got other forces acting on me--gravity and friction--that keep me in place. For the chair, which is very light and has wheels, the force of my push is much greater than any opposing friction, so it spins off across the room, even though it pushed me just as hard as I pushed it.

So now we come to the general ledger. Instead of equal and opposing forces, you have monetary transactions with money coming in and out. The money coming in must always equal the money going out. Yes, the amounts seem to cancel each other out, but the places the money is coming and going from won't necessarily have a zero balance. More specifically, every dollar in your business has to come from somewhere, like your credit card, bank account, or back pocket. It also has to go somewhere, like office expenses, rent, or the inaccessible crack between the file cabinet and the wall. For every transaction, you have to specify where the money comes from and where it's going, and the amounts on both sides of the ledger have to be the same. This is very convenient, because it means errors are both harder to make and easier to fix. If you are a careful bookkeeper, you can essentially keep your books free from even the most mundane typos.

It is possible to do double-entry bookkeeping by hand or in a spreadsheet like Excel, but it will be pretty tedious. That's why Quickbooks is such a great idea for small businesses--it's useful and versatile from an accounting standpoint and also user-friendly for non-accountants.