Bookkeeping Basics for Small Business#
What is Bookkeeping?#
Bookkeeping is the systematic recording of financial transactions.
Basic Accounting Terms#
Assets#
Resources owned by business (cash, inventory, equipment)
Liabilities#
Amounts owed (loans, creditors)
Capital#
Owner's investment in business
Revenue#
Income from business operations
Expenses#
Costs incurred in business
Recording Transactions#
Journal Entry Format#
| Date | Particulars | Debit | Credit |
|---|---|---|---|
| 1-Jan | Cash A/c | 50,000 | |
| To Capital A/c | 50,000 |
Rules of Debit & Credit#
- Increase in assets: Debit
- Increase in liabilities: Credit
- Increase in revenue: Credit
- Increase in expenses: Debit
Books of Accounts#
- Cash Book
- Journal
- Ledger
- Trial Balance
- Final Accounts
Conclusion#
Proper bookkeeping is the foundation of financial management.