Chapter 2
Outlining Your Financial Road Map with a Chart of Accounts
IN THIS CHAPTER
Introducing the chart of accounts
Warming up with balance sheet accounts
Creating your own chart of accounts
Grasping the basics of debits and credits
Getting schooled in double-entry accounting
Can you imagine the mess your checkbook would be if you didn’t record each debit card transaction? If you’re like most people, you’ve probably forgotten to record a debit card purchase or two on occasion, but you certainly learn your lesson when you realize that an important payment bounces as a result. Yikes!
Keeping the books of a business can be a lot more difficult than maintaining a personal checkbook. You have to carefully record each business transaction to make sure that it goes into the right account. This careful bookkeeping gives you an effective tool for figuring out how well the business is doing financially.
You need a road map to help you determine where to record all those transactions. This ...
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