I do not know where to start? Do not know the difference between a debt and credit? We have you covered on the basis of the base when it comes to accounting and understanding of your charges and credits.

The first is to launch the traditional definition of and credits. No, a flow is not a deduction, and credit is not an increase. They are the names of the columns in your general ledger accounting (99% of time is left on the debit credit card on the right side).

In double entry bookkeeping, or more precisely, the sum of each column equal. In principle, the sum of all charges on the total credit is the same – to guarantee this equality, you cannot eliminate the basic arithmetic errors. Everything is in the positive (No negative numbers here).

But what happens when, you ask? Basically, the accounts that your money must be strengthened with debits, credits and notes with. All other account debits and deductions with credits. It is a little confusing, but once you start accounting operation is faster and better you understand these concepts.

So … What are “your money” to all accounts? They are real money, money and the equipment and inventory that you have now. All assets must have this, as well as cash and miscellaneous expenses that you incur.

Let’s try a simple example, are we? You open your own business with $ 20,000. Their first record is the account to debit Audit “, and a credit to paid-in capital account.

Now if that you’ve made a sale. Say … $ 300. Not bad for your first sale. They were cash, which you obviously paid deposited in the account current business. If you’re not, there is a completely different problem, we should discuss. Your accounting for the day would be to charge sales $ 300 credit, and the current account of $ 300. Now is the end of your first month in business, time to pay the gas bill. In general ledger accounting, you would account for the spending account debit, credit and checking account. Get it?

Well, probably not. Accounting is not easy to get right now no, so ill at ease if you’re a bit lost. Take a look at your general ledger to understand how it works in close collaboration, and points are the most fundamental principles – the pressure to reduce credit, when we, together with expenditure to assets, and the money. If you remember that you’re on your way. The more you do, the easier it will be!