Category: Double-entry Bookkeeping
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Mastering the Accounting Equation: Essential Tips and Tricks for Accurate Financial Analysis
Understanding the Accounting Equation The accounting equation forms the basis of double-entry bookkeeping. It shows how a company’s assets, liabilities, and equity connect and stay in balance. Understanding each part helps track financial health and report accurately. Definition and Components The accounting equation is: Assets = Liabilities + Equity This equation shows that a business…
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Understanding Debits and Credits in Bookkeeping and Accounting: A Comprehensive Guide
The Fundamentals of Debits and Credits Debits and credits are essential to bookkeeping and accounting. They track changes in financial accounts and keep the books balanced. Each transaction affects at least two accounts. One side receives a debit, and the other receives a credit to show increases or decreases. The Role of Debits and Credits…
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Debits vs Credits: The Student’s Ultimate Guide to Mastering Accounting Basics
Understanding Debits and Credits Debits and credits form the base of accounting. Accountants use them to record every financial transaction and keep the books balanced. Each term has a specific meaning in tracking money moving in and out of accounts. Definition of Debits A debit is an entry on the left side of an account.…
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Double-entry Accounting Explained In Simple Terms
Double-entry accounting is really very simple provided you follow these rules. Everything starts with a Source Document. That is usually an invoice for something you have sold or a receipt for something you have bought. Each Source Document is copied into your double-entry system by creating Transactions. A Source Document always contains at least one…
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Learn Double-Entry Bookkeeping
Here’s a great resource from Loris Tissino. He has developed a site to step you through double-entry including transactions and posting. I think you will find this another very useful tool. Loris has written a piece for Accounting for Everyone describing it. Here we go: If you are a student and want to practice bookkeeping…