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...