Bookkeeper’s Cheat Sheet

old books bookkeeper's cheat sheet

If you do your own bookkeeping or work as a bookkeeper for someone else, there are some important accounting rules and terms you need to remember.  Looking for help keeping track of the accounting rules and terms? We have also included a Bookkeeper’s Cheat Sheet to help you with knowing when to use a debit or a credit in an equation.

Accounting Rules

Rule 1: Total debits must always equal total credits

Rule 2: Debits are always on the left

Rule 3: Credits are always on the right

Accounting Terms

Assets- Assets are things you own. Typically these include cash, money in the bank, money owed to you (receivables), inventory, equipment, and other property.

Liability- Liabilities are things you owe. Typically these include money owed to others (payables), credit card debt, payroll taxes due, sales tax due, and loans.

Equity- Equity is what the owners of an entity have invested in an enterprise. This can include stock, owner’s investment, and the value left in the business after the assets are used to pay off any outstanding liabilities.

Revenue- Revenue is the income that a business generates from its normal business activities.  Typically these include income generated from the sale of products and/or services.

Expenses- Expenses are the costs incurred in operating the business.  Typically these include such things as wages, rent, dues, supplies, and the like.

We hope our Bookkeeper’s Cheat Sheet can help you understand the impact certain transactions will have on your accounting system.

Once you have a better understanding of the accounting rules and terminology, you can get a better grasp on understanding your financial reports. Which reports are most important to look at? Read our article on the four important financial reports to start with.

Updated 9/27/2021