Bookkeeping for Dummies, 3rd Edition

Chapter 2

Creating a Framework

IN THIS CHAPTER

Finding a spot for every single transaction

Gathering materials with account classifications

Building foundations for your Profit & Loss report

Analysing income with a bird’s-eye view

Making everything just right with Balance Sheet accounts

Admiring the finished home — your first chart of accounts

If bookkeeping were just about doing your tax, the way you categorise information would be pretty simple. You would likely only use a handful of accounts to categorise expenses, and perhaps even fewer for your income.

However, your job as a bookkeeper is about much more than tax. You want to generate reports that explain exactly where your income comes from, which activities generate the most moolah, what the expenses are, how actual results compare against budgets, and lots more.

The way you categorise business transactions — in other words, ...