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Doubleentry Accounting and Bookkeeping principles explained in simple terms
>> YOUR LINK HERE: ___ http://youtube.com/watch?v=COOBti0xp0o
Double-entry accounting is really very simple provided you follow the rules in the video. • Learn more and take the 12 week online accounting course please visit: https://accountingforeveryone.com • 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 complete transaction, and depending on your accounting system sometimes more. • A double-entry transaction consists of a minimum of two Entries. • That is, each transaction you create must have at least two entries. • Each entry contains either a Debit or a Credit. • Debits and Credits are amounts of money. • For a Transaction to be true to the double-entry principle, two rules must be obeyed: • 1. The entries involved must contain at least one Debit and at least one Credit. • 2. The value of all the Debits must equal the value of all the Credits. • Each entry must consist of a minimum of four pieces of data as follows: • 1. Date • 2. Reference (so it can be identified with a source document) • 3. Amount (known as a Debit or a Credit) • 4. Account (whose balance will be increased or decreased by the amount depending on whether it is a Debit or a Credit) • Every transaction tracks an amount of money from one account to one or more other accounts. • As long as the Debit amounts equal the Credit amounts, then we know that all the money has been accounted for. • The idea that we are doubling the amount of data by making two entries is a myth. • The two (or more) entries merely record the flow of money from one account to another. That is its sole purpose. • It is called Double-entry because two entries are the minimum required to record the two accounts involved in every transaction. • For example, buying a computer for your business involves your Bank and your Equipment accounts. • Once the transaction has been entered, a look at your books will show how much you have left in your bank and how much you have spent on equipment. • If you don't know these things, it is unlikely your business will stay profitable as you will have no idea what is going on. • This is why double-entry accounting is used universally around the world and has been in existence for many thousands of years. • To find out more about double-entry accounting and bookkeeping please visit https://accountingforeveryone.com • Please also subscribe to this channel to get further simple updates to double-entry accounting so you can further your career or get your business in shape.
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