Category Archives: Business Accounting

Business Accounting Basics.
Business accounting fundamentals enable you to comprehend your financial statements and make informed decisions. They also prevent commingling of personal and business funds.

The core foundation of any business accounting system lies in debits and credits. Debits increase or decrease an account’s balance depending on the type of transaction, while credits decrease it. All aspects of a business accounting system – assets, liabilities, income streams and expenses – are affected by this basic principle.

Debits and credits form the backbone of your accounting system, impacting every entry in your general ledger. When setting up your business’s accounting software or system, the chart of accounts should be your initial focus; it outlines all accounts that need to be recorded in its books.

A business accounting system is double-entry, which means for every debit entered into your system, there must also be a corresponding credit entry. This ensures that your books remain balanced.

Accounting is a fundamental element of any small business. It helps you stay organized financially, meet legal obligations, and make informed decisions about the direction of your enterprise. Accounting plays an integral role in every aspect of running a successful venture.

Understanding three essential financial reports – the income statement, balance sheet and cash flow statement – requires understanding three essential documents. Learning to read and prepare these documents with calculations can save time, money and stress in the long run. If unsure how to proceed with this task, there are numerous services that offer professional assistance.