Accounting 101: Learn Basic Accounting

The Bookkeeping Master's new accounting video offers a quick presentation, which enables you to learn the basics of accounting in 7 minutes! The video and some accounting notes are below...

Debits and Credits

- Accounting is "all" about debits and credits

- Asset and expense entries are debits

- Liability and sale entries are credits

- Debits and credits should always balance (have equal totals)

- Assets are things that are owned

- Liabilities are things that are owed

Asset Examples

- Bank account (with a positive balance)

- Equipment

- Debtors (cash owed to the business by customers)

- Vehicles (that are owned)

Liability Examples

- Bank account (with a negative balance)

- Loans

- Creditors (cash owed by the business to suppliers)

Expenses Examples

- Rent

- Power

- Wages

Chart of Accounts

- A list of all asset, liability, expense and sale accounts, and the totals of those accounts

- Used to compile a profit and loss statement and a balance sheet

Profit and Loss Statement

- Sales minus expenses equals profit/loss

Balance Sheet

- Total of assets and liabilities

- Provides a snapshot of the financial position of the company (what is owned and owed by the business)

Please watch The Bookkeeping Master's Accounting 101: Learn Basic Accounting video...

  • Facebook Social Icon
  • Twitter Social Icon
  • YouTube Social  Icon
  • Instagram Social Icon



The information on this site cannot be relied on as accurate and up to date. We strongly advise you seek the advice of accounting and tax professionals before making any accounting related decisions.

Visit SM Accounting Ltd

This site contains free bookkeeping and accounting courses and is ideal for anyone looking to learn finance, bookkeeping or accounting. This site contains information on double-entry bookkeeping, basic accounting, credit control, business planning, etc. 

* We do not offer refunds on any digital products purchased on this site.