SNA Accounting Rule 2: Double and Quadruple Entry

For an institutional unit, national accounting are based on the principle of double entry, like business accounting. Each transactions must be recorded twice, once as a recourse (or a change in liabilities) and once as a use (or a change in assets). E.g., a households purchase of a consumer good will appear as a use, final consumption expenditure, and as an incurrence of liabilities if it is bought using a credit card, or as a decrease in assets if it is paid cash.

On the other hand, since most transactions involve two institutional units, National Accounts is based on the principle of quadruple entry. Each transaction must be recorded twice by the two transactors involved. For example; A social benefit in cash paid by the government to a household is recorded in both the household's and the government's accounts. In the government's account is this recorded as use in the secondary distribution of income account and as negative acquisition of assets, currency and deposits in the financial account. In the household's account as resource in the secondary distribution of income account and as acquisition of assets in the financial account.

Recording correctly the four transactions involved results in full consistency. In practice, national accountants have to relay on accounts, or data, that are not consistent, complete or even available. However, the principle of quadruple entry remains fundamental.