Comment by jldugger

> Most explanations are along the lines of "Here is a simple explanation that you are guaranteed to understand: <proceeds to describe the procedure>" which lacks intuition on why this is useful

Double entry accounting is useful because it enables local reasoning. Let me explain why! If you've remembered those other explanations, you hopefully remember the fundamental equation of accounting:

    assets - liabilities = shareholder equity

Well, you can also define this a bit more broadly as

    assets + Δassets - liabilities - Δliabilities = equity

In other words, changes in assets or liabilities must also balance. I sometimes think of these as "income" and "expense," probably because GNUcash has accounts of that type. If you rearrange that expanded equation you get

    (assets - liabilities) + (Δassets - Δliabilities) = equity

If the grouping on the left represents the state before a transaction, and the grouping on the right represents a single transaction, then we get a super useful auditing tool: as long as the book is balanced before any given transaction, the book will remain balanced after the transaction as long as the transaction itself is balanced. You can now reason about a narrow set of things instead of the whole book!

In practice what this means is if your system is losing cents on every transaction as OP article states, each transaction should be flagged as imbalanced. From there it should be super easy to see why, since you can examine a single transaction.

To achieve this you need all entries / actions to have a unique transaction ID to group by, and a notion of which accounts are liabilities and which are assets, etc. As OP article mentions, there's a ton of implementation nuance.