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Accounting System

Double-Entry Bookkeeping

Overview

Complete double-entry accounting system with automated journal entries, financial reports, and daily cash reconciliation.

Chart of Accounts

Journal Entries

Financial Reports

Daily Closing

Double-Entry Bookkeeping

Fundamental Principle

Every transaction has equal debits and credits

Debit = Credit

Debit Side (Dr)

Assets ↑

Cash, Bank, Inventory increase

Expenses ↑

Salaries, Rent, Utilities increase

Liabilities ↓

Loans, Payables decrease

Credit Side (Cr)

Revenue ↑

Sales, Service income increase

Liabilities ↑

Loans, Payables increase

Assets ↓

Cash, Bank, Inventory decrease

Chart of Accounts

1000 - Assets

1010 - Cash
1020 - Bank
1030 - Inventory
1040 - Equipment

2000 - Liabilities

2010 - Accounts Payable
2020 - Loans Payable
2030 - Tax Payable
2040 - Salaries Payable

3000 - Equity

3010 - Owner's Capital
3020 - Retained Earnings

4000 - Revenue

4010 - Sales Revenue
4020 - Service Revenue

5000 - Expenses

5010 - Cost of Goods Sold
5020 - Salaries Expense
5030 - Rent Expense
5040 - Utilities Expense

Journal Entries

Automatic Journal Entries

System automatically creates journal entries for:

  • Sales transactions (when payment completed)
  • Purchase orders (when goods received)
  • Payroll processing (when salary paid)
  • Expense recording

Example Journal Entry

JE-000001

Date: 2025-01-15

Description: Sales for the day

Account Debit Credit
1010 - Cash $1,000.00 -
4010 - Sales Revenue - $1,000.00
Total $1,000.00 $1,000.00

Financial Reports

Trial Balance

Lists all accounts with their debit and credit balances

Account Debit Credit
Cash$50,000-
Inventory$30,000-
Accounts Payable-$15,000
Sales Revenue-$100,000
Expenses$35,000-
Total$115,000$115,000

Profit & Loss Statement

Shows revenue, expenses, and net profit

Revenue $100,000
Cost of Goods Sold ($40,000)
Gross Profit $60,000
Operating Expenses ($35,000)
Net Profit $25,000

Balance Sheet

Shows assets, liabilities, and equity

Assets

Cash$50,000
Inventory$30,000
Total$80,000

Liabilities & Equity

Payables$15,000
Equity$65,000
Total$80,000

Transaction Examples

Example 1: Cash Sale

Customer pays $500 cash for food

Dr. Cash$500
Cr. Sales Revenue$500

Example 2: Purchase Inventory

Buy $2,000 inventory on credit

Dr. Inventory$2,000
Cr. Accounts Payable$2,000

Example 3: Pay Salary

Pay employee salary $3,000

Dr. Salary Expense$3,000
Cr. Cash$3,000