Learn Bookkeeping

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Getting Started

Learn More About:

Cash Disbursements

Cash Receipts

Journal Entries

It is not necessary to know bookkeeping or accounting to use our online bookkeeping service, however, for those who have a desire to learn more about bookkeeping, we have provided this page. There are online examples on our data entry page that are available at any time in case you need some basic help. For more advanced questions, there are trained professionals available via email. (Click on the support link in the upper right corner of the screen).

For example, we have tried to avoid references to Debit and Credit in our program, but to understand what is happening, a person would need to know some basic accounting fundamentals. This page is intended for those individuals who want to learn more about bookkeeping.

Definitions:

Bookkeeping

The activity of recording business transactions.

Double Entry Bookkeeping

An accounting technique which records each transaction as both a credit and a debit. Since each credit has one or more corresponding debits (and vice versa), the system of double entry bookkeeping should always lead to a set of balanced accounts (total debits = total credits), and if the accounts are out of balance, errors are easier to find.

Debit

A entry on the debit side (left) of an account.

Credit

An entry on the credit side (right) of an account.

The Accounting Equation

Assets = Liabilities + Owners Equity

(Revenue and Expenses are totaled together and included in the Owners Equity section as Current Year Income)

Account Types

There are five basic account types, and debits and credits affect them differently.

Account Type	Normal Balance	Debit	Credit
Assets	Debit	Increases	Decreases
Liabilities	Credit	Decreases	Increases
Owners Equity	Credit	Decreases	Increases
Revenue	Credit	Decreases	Increases
Expenses	Debit	Increases	Decreases

Balance Sheet:
A statement listing the total assets and liabilities, indicating the net worth of the company for the given moment in time. A balance sheet is cumulative over a period of years.

Income statement:
A statement that summarizes revenues and expenses for a period of time (Usually a Month or Year).

Trial Balance:
A work sheet showing the balances in each account - used to prove the equality of debits and credits.

Accrual basis:
A method of accounting where transactions are recorded as they occur regardless of when payment for that transaction is made or received

Cash basis:
An accounting method where transactions are recorded when the actual change of payment occurs, regardless of when the goods or services are delivered.

Chart of accounts:
A numerical listing of a businesses general ledger accounts.

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Learn More About How ABC Bookkeeping Corp. Handles:
Cash Disbursements	Cash Receipts	Journal Entries