What does a "double entry" refer to on a closing disclosure statement?

The term "double entry" in the context of a closing disclosure statement refers to the way transactions are recorded in a manner that each entry has an equal and opposite effect in two accounts. This ensures accuracy and accountability within financial records. Specifically, in real estate transactions, a "double entry" often pertains to expenses or costs that are shared between two parties, such as the buyer and seller. By reflecting the expense on both sides of the statement, it provides a clear and balanced picture of the financial aspects of the transaction.

In this scenario, expenses being shared between two parties indicate the nature of responsibilities each has regarding costs, such as closing costs or other fees that need to be settled at closing. This method helps to maintain precision in financial reporting and aids in reconciling accounts accurately.