Foundations
Debits and credits, the accounting equation, the chart of accounts, journals and ledgers, accrual versus cash. The mental model everything else in bookkeeping stands on, taught with T-accounts rather than jargon.
Start here
15 piecesNo background assumed — the pieces that build the foundation.
Guide · Intro · 7 min
Designing a chart of accounts that stays useful
A chart of accounts is the numbered list of buckets every transaction posts to. Here is how to structure the five account types, sensible numbering, sample charts for a service and a product business, and how to fix a chart that has sprawled.
Guide · Intro · 7 min
Double-entry bookkeeping explained from zero
Double-entry bookkeeping records every transaction in two places so the books always balance. Here is the accounting equation, what debits and credits actually mean, and one small business's first week posted entry by entry.
Brief · Intro · 3 min
Accounting equation practice: six worked mini-scenarios
Six small transactions, each traced through Assets = Liabilities + Equity and posted as a journal entry. A drill piece: work each one before reading the answer.
Brief · Intro · 3 min
Bookkeeping vs. accounting: where one ends and the other begins
Bookkeeping records and organizes transactions; accounting interprets, adjusts, and reports on them. The dividing line, the handoffs between the two roles, and what each should expect from the other.
Brief · Intro · 3 min
Fiscal year vs. calendar year: what the choice actually changes
A fiscal year is any twelve-month accounting period ending on the last day of a month other than December. Who benefits from one, who is stuck with the calendar, and what changes in the books.
Brief · Intro · 3 min
Undeposited funds: the clearing account that quietly piles up
Undeposited funds holds payments received but not yet banked, so grouped deposits match the bank statement. Why the account exists, the entries through it, and how balances get stranded there.
Brief · Intro · 3 min
Petty cash: the imprest system in five steps
The imprest method fixes the petty cash fund at one amount; receipts plus remaining cash must always equal it. Here are the five steps and the replenishment entry that records the expenses.
Brief · Intro · 2 min
Owner draws, distributions, and salary: which one you take depends on entity
Sole proprietors and partners take draws, S corporation owner-employees take payroll plus distributions, and none of these are expenses except wages. The entries for each, by entity type.
Brief · Intro · 2 min
Retained earnings: what it is and why owners misread it
Retained earnings is the running total of every profit the business has kept since day one, less losses and distributions. It changes at year-end close, not during the year — and it is a claim, not a bank account.
Brief · Intro · 3 min
Revenue, income, and cash: three words that are not synonyms
Revenue is what you earn from customers, income is what remains after expenses, and cash is what actually sits in the bank. A business can be high on any one and dangerously low on the others.
Brief · Intro · 3 min
Assets, liabilities, and equity: the three balance-sheet families
Assets are what the business owns, liabilities what it owes, and equity the owners' residual stake. Everyday examples of each, and why the three always reconcile to the accounting equation.
Brief · Intro · 3 min
Trial balance basics: what it proves and what it doesn't
A trial balance lists every account with its debit or credit balance and proves the ledger's debits equal its credits. It does not prove the books are correct — here is how to read one and what it can miss.
Brief · Intro · 3 min
The general ledger: how postings flow from journal to trial balance
The general ledger is the master file of every account and every posting. Here is the pipeline — journal entry, ledger posting, trial balance — and how to trace one transaction through all three.
Brief · Intro · 3 min
What is a journal entry? Anatomy and proper use
A journal entry is the formal record of one transaction: date, accounts, debits equal to credits, and a memo. Here is each part, when a manual entry is the right tool, and when it is the wrong one.
Brief · Intro · 3 min
Debits and credits: the one-table cheat sheet
Debits increase assets and expenses; credits increase liabilities, equity, and revenue. One reference table, derived from the accounting equation, replaces every mnemonic.
The working layer
5 piecesThe day-to-day rules, mechanics, and habits.
Guide · Working · 6 min
Accrual vs. cash basis: what each shows, what each hides
Cash-basis books record money when it moves; accrual books record income when earned and expenses when incurred. Here is what each basis reveals and conceals, who is allowed to use cash, the hybrid most small businesses actually run, and the entries that convert one to the other.
Brief · Working · 3 min
Sales tax payable: collect it as a liability, never as revenue
Sales tax you collect belongs to the state from the moment it hits your hands. The collection entry, the remittance entry, and the reconciliation that keeps the payable honest.
Brief · Working · 3 min
Recording loans correctly: principal, interest, and why proceeds aren't income
Loan proceeds are a liability, not revenue, and every payment splits between interest expense and principal reduction per the amortization schedule. The entries, and the two errors that wreck a year of books.
Brief · Working · 3 min
Contra accounts: the accounts that subtract
A contra account carries the opposite balance of its partner and subtracts from it on the statements. Accumulated depreciation, allowance for doubtful accounts, and sales returns are the three every small business meets.
Brief · Working · 3 min
Expense or asset? When a purchase gets capitalized
A purchase consumed within the year is an expense; one that benefits multiple years is capitalized as an asset and depreciated. Here is the dividing line, the de minimis safe harbor shortcut, and the entries for each treatment.