MEPX
Chapter 6 of 10All chapters
  1. 1What accounting is for
  2. 2The accounting equation
  3. 3The three statements
  4. 4Accruals and matching
  5. 5Profit against cash
  6. 6Bookkeeping in practice
  7. 7Reading the numbers
  8. 8Costs
  9. 9Controls and audit
  10. 10Reading a company report

Chapter 6 of 10

Bookkeeping in practice

The daily mechanics.

The routine

Record transactions, reconcile against the bank, chase what is owed, pay what is due, and close each month. Software automates the entries and not the judgement.

  • Reconciliation is what catches missing and duplicated entries.
  • Keep business and personal accounts entirely separate.

Chart of accounts

The list of categories transactions are filed into. Designing it around the questions you will ask later is what makes reports useful rather than merely correct.