Chapter 1
Setting Up the Books
IN THIS CHAPTER
Navigating the accounting cycle
Choosing between cash-basis and accrual accounting
Deciphering double-entry bookkeeping
Introducing the Chart of Accounts
Reviewing the types of accounts that make up the chart
Creating your own Chart of Accounts
All businesses need to keep track of their financial transactions — that’s why bookkeeping and bookkeepers are so important. Without accurate records, how can you tell whether your business is making a profit or taking a loss?
The first part of this chapter covers the key parts of bookkeeping by introducing you to the language of bookkeeping, familiarizing you with how bookkeepers manage the accounting cycle, and showing you how to understand the most difficult type of bookkeeping — double-entry bookkeeping.
Can you imagine the mess your checkbook would be if you didn’t record each check you wrote? ...
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