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
Asset i
Balance Sheet
Normal
Balance
Debit
Liabilityii
Balance Sheet
Credit
Credit
Debit
Equity iii
Balance Sheet
Credit
Credit
Debit
Income iv
Income Statement
(aka Profit & Loss)
Credit
Credit
Debit
Expense v
Income Statement
(aka Profit & Loss)
Debit
Debit
Credit
Account Type
Reported On
Increase
Decrease
Debit
Credit
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
iii
Equity is the value retained in the business – what it is worth
iv
Income is what is earned as a result of the operation of the business
v
Expenses are what is paid to support operation of the business
Get more free bookkeeper tips, tricks and tools at:
www.TheFreelanceBookkeeper.com