Why You NEED to Know The Five Account Types - Accounting Basics - Part 2
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- เผยแพร่เมื่อ 25 มิ.ย. 2024
- Learn the five main account types and their nature to help you figure out which entries into your accounts should be debits and and which ones should be credits.
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This video is the second of a series of four video tutorials on accounting basics for small business owners:
* Part 1 - • UNRAVEL the Mystery of...
* Part 2 - • Why You NEED to Know T...
* Part 3 - • DISCOVER the Magic of ...
* Part 4 - • The SIMPLE TRICK to Do...
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Please note that Bullseyemoney is not a financial or tax adviser. Our videos are here to inform you and the information provided does not constitute financial, taxation, legal, business or other professional advice and should not be relied upon as such. Bullseyemoney is not liable or responsible for any financial, tax, legal, business or other decisions you make. If you are looking for advice, you should seek a suitable and qualified adviser.
This video helped me so much!!
Het dude, Im your new fan. Your chanel is so underrated, Im gonna share it with my friends!
Wow, thanks!
Loving the content.
Thanks for the video, but wish it would relate it to the double entry accounting equation: Assets + Expenses = Liability + Revenue + Equity. Nature = Side of the equation of the account type. Going further, can be explained how this equation is used to track transactions via two entries (double entry) in two related accounts, etc.
I've seen too man videos that fall back on "just accept it" instead of providing the reasoning, which leave ppl with the same confusion. These are explainable concepts.
Main ambiguities I'm trying to sort out is WHY account types are where they are in the equation, but as I watch more videos/read more articles, it's gradually becoming clearer. Still hoping to find that one video/article that ties it all together,
No worries. Everybody has their own way of learning. I just accepted the nature of account types decades ago and haven't been confused about it ever since. I'm making more "presentation" style videos about bookkeeping so if you find an explanation you like feel free to link to it from here and I'll see if I can incorporate it into one of my other videos. Cheers.
Very helpful!!
Glad it was helpful!
Way better explained than a paid online course I recently enrolled to. Thank you :)
Glad it was helpful!
Thank you❤
amazing content
Thanks!
Very nicely explained, basic concepts are clearly explained
Glad you liked it
I am regular viewer of your you tube channel and I liked the way you explain logically
Thank you very much for this thorough explanation. I had a job interview this morning and I really wish I knew these basics at that time. Now I feel I'll be more confident when interviewing with other companies. Did you come up with this debits&credits theory learning method yourself? It is decent I want to say.
Thanks for the nice feedback and good luck on your job hunt 🙂
Hi! do you have a website with some printable cheat sheets? i love your videos. so helpful!
Thanks for the compliment :)
What sort of cheatsheets are you after?
hi Bullseyemoney, im having difficulty figuring out the mistake ive made, i have 6 invoices that are not reconciled but arent in my reconcile list. i have checked the bank statements list and they are not in there either, so no duplicates have been made that i can tell. any advise would be amazing. just started using Xero a few weeks ago, Thankyou
Are the invoices approved in Xero?
@@TheBookkeepingChannel I'm not sure I'll check that out they've been paid and the money was recieved in our bank account. Thankyou
Also check that if you have set up your invoices in Xero that they aren't in Draft mode. If they are in Draft mode you can't reconcile your bank transactions against them. The invoices need to be Approved. Cheers.
But...I need more of an explanation of how each account is either a credit or debit by nature! I'm sorry but I don't get the linkage at this point.
It's something you commit to memory. Trying to understand why something is credit or debit by nature is unnecessary.
First of all, many thanks to the video creator(s).
Take any transaction having a monetary value equal to x (in any currency).
When recording the transaction in the ledger, the debit entry always relates to the ledger account receiving the money value x. The credit entry always relates to the account providing the money value x.
For example, the double entry for a cash sale paid by a customer directly to your business bank account records the money provided by the sales account and the same amount received by the bank account. The sales account credits the bank account.
Thinking about which account receives the money (the debit) can help to identify which corresponding account has provided the money (the credit).
I hope this makes sense.
I understood it easily with an article (I'll post the link in a separate comment in case it's removed EDIT: it did get removed instantly, just google it). It's called "accounting for computer scientists", written in 2011 in some blog, it was recommended to me because I'm trying to develop a personal project on personal finance tracking.
The article uses graphs to model accounting, avoiding most of the jargon throughout the explanation (and later reconciling most of it). You still need to spend some time letting the concepts sink into your mind, but once they did for me, it makes perfect sense to the point where it triggered me a little bit when the vid says you just have to memorize it. It makes perfect logical sense, and graphs and surprisingly intuitive.
Now, you still need to keep watching accounting stuff, because the article doesn't go too in depth (for good reason). But having that model in your brain to make sense of it all is wonderful.
I❤❤❤❤ it
So continue God will increase your knowledge and intelligence in JESUS name 🙏🙏🙏🙏🙏🙏🙏
🥰🥰🥰🥰🥰🥰 Be blessed