Bookkeeper'S Cheat Sheet

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Bookkeeper’s Cheat Sheet
At a Glance Reminders
Accounting Equation:
Assets = Liabilities + Equity
Rules of Double-Entry Bookkeeping:
• Total Debits must always equal total Credits
• Debits are always on the left
• Credits are always on the right
How Debits and Credits show up in the Chart of Accounts
Normal
Account Type
Reported On
Increase
Decrease
Balance
i
Asset
Balance Sheet
Debit
Debit
Credit
ii
Liability
Balance Sheet
Credit
Credit
Debit
iii
Equity
Balance Sheet
Credit
Credit
Debit
Income Statement
iv
Income
Credit
Credit
Debit
(aka Profit & Loss)
Income Statement
v
Expense
Debit
Debit
Credit
(aka Profit & Loss)
Reporting Reminders:
• The Balance Sheet is a snapshot of the business’s financial condition on a specific date
• The Income Statement reports the profit or loss over a period of time
• Net profit or loss is reported in the Equity section of the Balance sheet
i
Assets are what the business owns of value (cash, property, other valuables)
ii
Liabilities are amounts the business owes to others
Equity is the value retained in the business – what it is worth
iii
iv
Income is what is earned as a result of the operation of the business
Expenses are what is paid to support operation of the business
v
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