Accounting and Bookkeeping Principles

Recording every payment is the cornerstone of effective bookkeeping. Each financial transaction, whether it’s a sale, purchase, or expense, needs to be documented. This ensures your financial records are accurate and up-to-date.

Capital & Revenue Expenditure & Receipts

A bookkeeper is responsible for identifying the accounts in which transactions should be recorded. Bookkeeping in a business firm is an important, but preliminary, function to the actual accounting function. Very small businesses may choose a simple bookkeeping system that records each financial transaction in much the same manner as a checkbook.

Similar to Basic Bookkeeping (

It’s important to keep accounting basics payroll expenses accurate and updated to ensure the business meets legal requirements. This refers to the money spent to purchase or manufacture the products or services the business sells. The chart of accounts lists every account the business needs and should have. If you are going to offer your customers credit or if you are going to request credit from your suppliers, then you have to use an accrual accounting system.

Debits and Credits

• In this final module for Course 1, you will gain an understanding of key accounting assumptions and principles and learn about the different types of accounting methods bookkeepers use.
• Bookkeepers track the materials and goods purchased for the business in the purchases account.
• The cost basis of physical assets with a large amount of value can be depreciated to capture the loss of value as it goes down over time.
• If you have a passion for helping clients solve problems, this course is for you.

If you are operating a small, one-person business from home or even a larger consulting practice from a one-person office, you might want to stick with cash accounting. For example, if your income statement shows a consistent increase in sales but a sharp rise in expenses, you can identify areas where costs can be cut. This helps you make strategic plans retained earnings and set realistic objectives for your business.

• Every time money changes hands in your business, that’s a financial transaction.
• It is important to have a proper way to store all documents like invoices and receipts.
• Enrol and complete the course for a free statement of participation or digital badge if available.
• In this module, you’ll be introduced to the role of a bookkeeper and gain an understanding of how to use the accounting equation and double-entry accounting.
• For instance, one of the items under the expense account is salary or payroll expenses.

For larger businesses, compared to Excel, Easybooks, QuickBooks, or Xero would help with digital bookkeeping allowing for easier tax management. Plans should be set for monitoring income, expenses, invoices, and taxes. The single and double-entry bookkeeping methods are the ones most commonly used within small businesses. Your personal bank account uses the single-entry method, with Grocery Store Accounting debits and credits recorded as your balance increases and decreases.

• Think of it as having a map that shows exactly where you are and where you need to go.
• Bookkeeping is the process of systematically recording, organizing, and maintaining a business’s financial transactions.
• To keep track of your business finances accurately and make the filing tax process smoother, it is important to maintain records for both your personal and business finances separately.
• It involves making judgments and decisions based on the financial data.

Equity is the investment a business owner, and any other investors, have in the firm. The equity accounts include all the claims the owners have against the company. The business owner has an investment, and it may be the only investment in the firm. If the firm has taken on other investors, that is reflected here. Staying updated with the latest trends and regulations ensures you remain competitive.

Take your learning further

With EasyFiling, keeping books is easier than how most people perceive it and becomes an organized procedure that focuses on the growth and financial sustainability of your business. Whether it is starting a new business or running an existing one, EasyFiling takes care of all your records. With EasyFiling, you will always have defined guidance to avoid the violation of both federal and state tax rules. Tax laws can be hard to navigate through but, EasyFiling makes it easier. Deductible cost recording, categorization, and other bookkeeping are all a part of the services we provide to make tax filing easy for our clients.