Double entry book keeping is a standard practise in accountancy. It can be first tracked to Venice where the merchants used this method to monitor their transactions, and was explained and written about in 1494 by Luca Pacioli. The first English book on the subject was written in 1543 by George Gouge in London. The practice of double entry book keeping has changed very little in the last 500 years and is a standard across the world.
In the original paper it stated that every transaction has a dual effect, where there is an increase in one there is a decrease in another always leading to a sum of zero. For instance if a product is sold the inventory reduces, or if the assets of a company increase the cash in the bank reduces. For each transaction there is a debit and a credit and therefore requires a double entry.
A debit can be classed as any increase to certain things that lead to a debit, such as assets, expenses, losses, accounts receivables or debts owing to the company and drawings. A credit on the other hand is an increase in anything that leads to a credit, such as liabilities, revenue, accounts payable or any debts to other people, owner equity or profit.
Once the list of debits and credits balance, then a trail balance can be created. The trail balance is a method of self checking and allows for the preparation of the balance sheet and the profit and loss account.