Difference Between Double-Entry Reconciliation and Account Conversion
In double-entry accounting, commonly used by companies, every financial transaction is posted in two columns of a balance sheet.
For example, if a business takes out a long-term loan for $10,000, the accountant credits the long-term debt column with that amount and debits the cash column with the same amount. When these amounts are added together, the account reconciles
or balances at zero. Similarly, imagine that a business incurs an invoice for carpet-cleaning services. It credits the amount of the invoice in its accounts payable column, and it debits accounts payable and credits the cash column. Again, the two columns should agree, balancing out at zero.
Under the account conversion method, records such as receipts or canceled checks are simply compared with the entries in a ledger.