Know basic accounting principles.

There are a few basic accounting principles that must be remembered when maintaining, updating and balancing your accounts. A credit in one account always equals a debit in another. Also, remember that you must subtract the liabilities from the asset value to determine the equity . Revenue alone will not give you a clear picture of the worth of your accounting.

To ensure proper accounting in each part of your life, you should follow a simple procedure - keep or make a receipt of each transactions. Analyze each transactions to determine the type of transaction, accounts involved and the resulting debit or credit to individual accounts. Record these transactions in the general journal so you can access the information in the future. Transfer, or post, the information to the appropriate accounts in the general ledger and then balance the amounts by adding or subtracting from each specific category and summing to make sure that the credits are equal to the debits. You should make any adjustments needed at the end of the period and close the account by taking the balance to zero and preparing a financial statement (balance sheet, income statements).


"If you are new to accounting, the terms and principles can be very overwhelming; however, help is always available. Take some accounting courses to learn the proper methods of accounting - courses are available at most local community colleges. Purchase accounting software. It can guide your accounting procedures and ease the confusion of assigning credits and debits. Most software does this by prompting you to enter the amount and the payee and then automatically recording the entry in the two appropriate accounts. Some software even includes a "primer" that teaches you basic accounting principles.


So, if you're a small or startup business owner and a beginner accountant, remember to record each transaction as it occurs, make sure your entries are accurate and let accounting-based information guide each of your financial decisions - ensuring the financial security of your company...."

Sincerely,
eleena