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 and accounting, what can you do? If you look for explanations on the web, you’ll find lots of tutorials that teach you the basic concepts, like what an account is, how double entry works, how to prepare a trial balance or a financial statement, and so on. That’s fine, but what do you have to do to practice?
Probably you need to actually write down your journal entries, preparing a paper with some T-accounts, and manually copy the amounts from the journal to the T-accounts. To prepare the statements, you have to make dozens of (boring) sums, putting it all together in a nice paper.
If you are a bit more evoluted, you can open up a spreadsheet, and do your journal entries there. Some sorting, some filtering, some subtotals computing, and you are almost done. Better than using pen and paper, but a bit complicated, though (and things tend to get messy if you don’t pay attention to some details).
Of course, you could use some software to accomplish your task. You can find programs that are actually used by companies to do the job. The problem with this approach is that these kind of programs are not much flexible (they don’t have to). You cannot easily adapt the chart of accounts to your needs, you have to fill tons of information that are very important for the business’ life but irrelevant for what concerns your exercise, and sometimes you cannot even edit what you have previously done.
If you are a student and faced this kind of problems, you’ll be glad to know about a new web site aimed to allow you practice bookkeeping keeping everything easy. It’s LearnDoubleEntry.org. The usage is completely free, and the source code is available as free software. The good news is that you don’t have to install anything on your computer, since it is web-based. Just login, create a firm, and start bookkeeping. As you proceed, you can check the Ledger, the Trial Balance and the Financial Statement. If you make errors, you can easily correct them. You can have your transactions analysed, and you are warned if some of the results don’t look normal (like having cash with a negative balance). You can use a standard chart of accounts or prepare a new one. You can share your firm with another student, so that you can work together. And you can send a link to your teacher, if you want him/her to check it.
For those with a passion for languages and internationalization, there is also the possibility to prepare a multilanguage chart of accounts. The application is under development, but already usable enough. Of course, it is open to improvements (you can help by sending comments and reporting bugs).