![]() It’s quick and easy-and that’s pretty much where the benefits of single-entry end. If you’re a freelancer or sole proprietor, you might already be using this system right now. ![]() Single-entry accounting involves writing down all of your business’s transactions (revenues, expenses, payroll, etc.) in a single ledger. Recording transactions this way provides you with a detailed, comprehensive view of your financials-one that you couldn’t get using simpler systems like single-entry. There’s one more common accounting term you should know here: chart of accounts, which is a big list of all your accounts (what kind of transaction in your business is an asset, what’s a liability, what’s an equity, etc.). ![]() If done correctly, your trial balance should show that the credit balance is the same as the debit balance. All these entries get summarized in a trial balance, which shows the account balances and the totals of your total credits and total debits. When making these journal entries in your general ledger, debit entries are recorded on the left, and credit entries on the right. Each accounting entry affects two different accounts: for example, if you sell a cup of coffee, your cash account goes up, and your inventory account goes down. Every financial transaction gets two entries, a “debit” and a “credit” to describe whether money is being transferred to or from an account, respectively. ![]() Double-entry accounting is a method of bookkeeping that tracks where your money comes from and where it’s going. ![]()
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