In accounting, credit, and debit are terms used to indicate the effect of a transaction on different types of accounts. These terms are fundamental to the double-entry accounting system, where each transaction involves at least two accounts and has equal and opposite effects on those accounts. Here’s an explanation of credit vs. debit in accounting 1. Debit Debit entries increase asset accounts and decrease liability and equity accounts. Debit entries are recorded on the left

The key concept in accounting is the principle of double-entry bookkeeping, which is based on the accounting equation… Assets = Liabilities + Equity This equation forms the foundation of accounting and reflects the fundamental relationship between a company’s assets, liabilities, and equity. Here’s a breakdown of each component 1. Assets – Assets are the economic resources owned or controlled by a company that have measurable value and are expected to provide future benefits

Accounting rules, also known as accounting principles or generally accepted accounting principles (GAAP), are a set of standards, conventions, and procedures that govern the preparation and presentation of financial statements. These rules ensure consistency, comparability, and transparency in financial reporting across different organizations. Some of the key accounting rules include… 1. Accrual Principle – This principle states that revenues and expenses should be recogniz

The “thumb rule” of accounting is a colloquial term that refers to a simple guideline or heuristic used in accounting to quickly estimate or approximate financial figures or outcomes. It’s crucial to know that unlike the “golden rules” of accounting, which are fundamental principles guiding the recording of transactions, thumb rules are more like shortcuts or rough estimates that are not necessarily based on formal accounting principles or standards. They may vary depending o

The concept of the “Six Golden Rules of Accounting” is not a widely recognized principle in accounting. In traditional accounting, there are typically three golden rules, also known as fundamental principles, which guide the recording of financial transactions. These are… 1. Debit what comes in, credit what goes out – This rule applies to assets and expenses. When an asset or an expense increases, it is debited; when it decreases, it is credited. 2. Credit what comes in, deb

The daily tasks of accountants can vary widely depending on their specific role, industry, and organization. Here are some common activities that accountants may engage in throughout their workday… 1. Recording Financial Transactions – Accountants often spend time recording financial transactions such as sales, purchases, payroll transactions, and other financial activities into the accounting system. This involves accurately categorizing transactions and ensuring they are p

In QuickBooks Online (QBO), there are three primary levels of access or user roles that determine the level of permissions and access to the company’s financial data. These user roles are: Master Administrator : The Master Administrator has the highest level of access and control within QuickBooks Online. This role can perform tasks such as managing user access, changing subscription settings, accessing all areas of the company file, and making administrative changes. There c

Starting with basic accounting involves understanding key concepts and principles and gradually building practical skills. Here’s a step-by-step guide to get you started… 1. Learn Basic Accounting Principles – Familiarize yourself with fundamental accounting principles such as the accounting equation (Assets = Liabilities + Equity), double-entry bookkeeping, revenue recognition, expense recognition, and accrual accounting. There are many online resources, textbooks, and cour

To succeed in accounting, you need a combination of technical, analytical, and interpersonal skills. Here’s a breakdown of the essential skills required for accounting… 1. Technical Accounting Knowledge – Understanding accounting principles, concepts, and standards is fundamental. This includes knowledge of double-entry bookkeeping, financial statement preparation, tax laws, auditing standards, and relevant accounting software. 2. Numerical Proficiency – Strong mathematical