To illustrate the difference (hopefully I get this right): A transaction needs to balance, left vs right. For example, you receive a sales order for 1000€ of w

To illustrate the difference (hopefully I get this right): A transaction needs to balance, left vs right. For example, you receive a sales order for 1000€ of widgets, which cost you 600€. You ship them. You invoice for 1000€. No money moved (hopefully you do get paid at some point though). However, you need to do some bookkeeping. On the left side of the ledger (debits): Accounts receivable 1000€. Cost of goods sold 600€. On the right side of the ledger (credits): Revenue goes up by 1000€. Inventory goes down by 600€. These completely match. No money has moved, but the books are now up to date and balance. Any transaction that does not balance should be rejected.