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Double Entry Bookkeeping

The most important terms in time management

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What is double entry bookkeeping?

Double entry bookkeeping is a system of accounting where every transaction is reflected in two accounts: credit and debit. There are always two columns for transactions - one for debit entries and one for credit entries. One account will be debited because it receives value and another will be credited.

How to do double entry bookkeeping

When you are keeping double entry records the main thing to remember is that the left page or column is always for debit entries while credits are recorded on the right. When a debit or expense is added it reduces the credit or income account and when a credit account is increased the debit side decreases.

Example: Your company provided a service and issued an invoice for 300 USD with 30 day due date. As the service was performed and the revenue was earned you add the 300 USD in the Service Revenue account with credit. As the payment is still to come, you cannot add this amount to cash yet. That’s why you need to use Account Receivable and debit it with 300 USD.

The main rules of double entry bookkeeping are

  • The capital invested by the business owner must be recorded along with the business assets and liabilities
  • For every transaction the value of debits must equal the value of credits
  • Every time a business transaction takes place an entry has to be made on both sides of the spreadsheet or ledger

Are you asking yourself how to do double entry bookkeeping quickly and without fuss? Why not let zistemo do the work for you?

Zistemo account speeds up and simplifies the double entry book keeping process. Keeping all sales and expenses data in one place helps your business save valuable time and money. You can also invite your tax consultant to do the work for you.

Billing software Bookkeeping D Double Entry Bookkeeping


Related words

Employee Time Tracking

What is employee time tracking? Employee time tracking is a function that is used to track the amount of time an employee spends on particular assigned tasks. Tasks usually fall under specific projects.

E

Balance Sheet

What is a balance sheet? A simple balance sheet is like a snapshot of the company’s overall financial health. It shows the assets, liabilities and equity of the company. This brings us to simple equation:

Accounting system B Balance sheet

Cost

What is the cost? Cost is a value of money that a company had to spend to produce its goods or services. It is calculated as the amount that company spends in order to produce a certain unit of a product.

C

Accounting Year

What is an Accounting Year? An accounting year is annual financial reporting period in which company organizes its financial data. It is useful when you are running a business. Potential shareholders analyze the company’s performance through its financial statements.

A Accounting system Accounting year

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