Are You a Beginner at Bookkeeping?

Hey there, are you new to the world of bookkeeping? When you are diving into the pool of accounting in North San Antonio, you are bound to come across the term and the process of bookkeeping! So, isn’t it better to explore the subject than to be intimidated by it?

Let’s explore bookkeeping for beginners!

Single or double-entry bookkeeping?
When you think about single-entry bookkeeping, think of it like keeping your check register. It’s all about recording transactions as the bills are being paid, and making deposits into the company account. Usually, it only works if we have a small company at hand, which has a low volume of transactions.

In other scenarios, where the company is of any complexity as well as size, you should set up a double-entry bookkeeping system. This is where at least two entries are made for each and every transaction. Credit is made to another accounting after a debit is made to one account. This becomes the key to double-entry accounting.

Using cash or accrual accounting?
Whether or not should one be using a cash or accrual accounting system would be one of the first decisions that one would have to make when setting up the bookkeeping system. If you are looking at accounting in North San Antonio for operating a small business from home or even if it is a larger consulting practice coming from a single-person office, it’s better to go with cash accounting. Using cash accounting would mean recording your transactions when the cash changes hands. When using accrual accounting, you would be recording purchases or sales immediately. This would be the case even if the cash doesn't change hands.

A better look at assets, liabilities, and equity
One thing to remember before anyone sets up their bookkeeping system is that they have to understand the firm's basic accounts. This includes the assets, the liabilities, as well as the equity. Assets refer to those things that the company owns. This includes the company’s inventory as well as accounts receivables. On the other hand, the liabilities refer to those things that the company owes. This includes what they owe to their accounts payable or suppliers, business and bank loans, mortgages, as well as any other debt on their books. Lastly, equity refers to the ownership that a business owner, as well as any investors, have in the firm.

There is a lot more to know about bookkeeping services San Antonio, but these basics will help in giving you a good direction!