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Free Bookkeeping Course

This page contains our free online bookkeeping course. It will teach you the basics of bookkeeping, including double-entry bookkeeping.

The Course Covers:
 

  • The basics of double-entry bookkeeping

  • Fundamental bookkeeping terminology

  • Understanding debits and credits

  • How to compile basic bookkeeping reports

 

Course Modules:

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To start the bookkeeping course, scroll down

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This course is FREE, and no registration is required!

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Jump to:

An Introduction to Bookkeeping​

Bookkeeping Terminology Explained

Double-Entry Bookkeeping Explained

Understanding Nominal Accounts

Financial Statement Basics

bookkeeping introduction

FREE Online Bookkeeping Course

Free Bookkeeping Course

Part 1: An Introduction to Bookkeeping

Module overview:

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  • An Introduction to bookkeeping

  • Bookkeeping definition 

  • Accountant definition 

  • Why bookkeeping is needed 

What is a bookkeeper?

A bookkeeper keeps a record of the financial/accounting transactions of a business, company, or other entity. These records are called the accounts or the "books", hence the term bookkeeper or book-keeper. 

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Accounts can be referred to as "books", as traditionally, accounting transactions were manually recorded in various books or ledgers - a sales book, a purchases book, a cash book, etc.  

What is bookkeeping?

Bookkeeping is the term used to describe the recording of financial/accounting transactions of a business, company, or other entity.

 

When someone does the bookkeeping, they keep financial records and organise all financial transactions related to sales, revenue, expenses, purchases, bank accounts, liabilities, and assets. 

Why do you need a bookkeeper? Why does bookkeeping need to be done?

Accurate bookkeeping is needed for many reasons. Here are the three main reasons:

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  1. It is a legal requirement. Governments require that businesses keep accurate financial records. 

  2. Financial analysis. With accurate and up-to-date accounting records, it's possible to analyse the financial health of an entity, including an entity's profitability, money owed to suppliers, money owed from customers, sales performance, growth forecasts, etc. 

  3. Taxation. Accounting records make it possible to calculate any taxes owed to governmental bodies.

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An accurate set of accounts is compiled using a bookkeeper and accountant unless you understand bookkeeping or accounting yourself. 

What is an accountant?

The terms 'bookkeeper' and 'accountant' are sometimes used interchangeably. Still, accountants generally focus on an entity's year-end financial statements and tax calculations, whereas bookkeepers keep records of the day-to-day transactions of an entity. 

bookkeeping terms explained
Bookkeeping Course Part 2

Part 2: Financial Terms Explained

Module overview:

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  • An introduction to bookkeeping terminology

  • Capital

  • Assets

  • Liabilities

What is capital?

Capital is the money a business owner has personally invested into a business or entity. Capital is also referred to as equity. Capital and equity are amounts the company owes to the business owner. 

What are assets?

An asset is an item a business or company owns that has value.  Typical assets include office furniture, computer equipment, vehicles, property, machinery, debts owed to the entity, and cash. 

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Assets do not have to be tangible - they can be intangible -  but most assets are tangible. Examples of intangible assets are websites, software, and patents. 

What are liabilities?

A liability is something that a business owes. They are usually in the form of debt - debts owed by the company. 

 

Typical liabilities include bank loans, credit cards, finance and lease agreements, taxes, and money owed to suppliers. 

double entry bookkeeping explained
Double Entry Bookkeeping

Part 3: Double-Entry Bookkeeping Explained

Module overview:

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  • An introduction to double-entry bookkeeping 

  • Double-entry bookkeeping definition 

  • Debits and credits explained 

  • Purchases, assets, liabilities, sales, expenses

What is double-entry bookkeeping?

Double-entry bookkeeping is an accounting method which entails at least two entries for every financial/accounting transaction. These entries consist of debits and credits - every accounting transaction will have a debit entry and a corresponding credit entry. 

What are debits and credits?

The terms 'debit' and 'credit' refer to the different sides of accounting transactions. Every financial transaction of an entity will have at least one debit entry and one credit entry. 

Debit and credit examples

A payment for an expense from the company bank account:
Debit expense account

Credit company bank account

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A payment received from a sale into the company bank account:
Debit company bank account
Credit sales account

A payment for office equipment from the company bank account:

Debit asset account

Credit company bank account

 

A loan received into the company bank account:

Debit company bank account

Credit liability account 

Bookkeeping Course Banner
Nominal accounts explained
Bookkeeping Course General Ledger

Part 4: T-Accounts Explained

Module overview:

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  • Debits and credits continued

  • Nominal accounts explained

  • Sales and expense accounts

  • Asset and liability accounts 

What are t-accounts?

T-accounts are the accounts that debits, and credits are posted to. They can also be called nominal accounts. 

 

Expenses, sales, assets, and liabilities are categorised into specific items. For example, the expense accounts will have particular accounts for all the company's expenses, such as electricity, stationary, travel, rent, etc. Each of these accounts is a t-account. 

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T-accounts are also named nominal accounts. All the nominal accounts combined are called the nominal or general ledger. 

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A company's general ledger may look something like this:

General Ledger Example

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Asset Accounts

Office equipment account

Motor vehicle account

Company bank account

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Liability Accounts

Bank loan account

Suppliers account

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Sales Accounts

Shop sales account

Website sales account

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Expenses Accounts

Rent account

Stationary account

Staff wages account

Electric account

Travel account

Software account

Bank charges account

financial statement basics
Bookkeeping Course Financial Statements

Part 5: Financial Statements Explained

Module overview:

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  • Financial statements

  • Profit and loss statement

  • Balance sheet

  • Compiling financial statements

What is a profit and loss statement?

A profit and loss statement shows a company's profitability for a selected period. It lists the entity's sales and expenses. 

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A profit and loss statement often shows gross and net profit, often called gross margin and net margin.

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The equations for gross and net profits are:

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Gross profit = Sales minus Cost of Sales

Net Profit = Gross Profit minus Expenses(Overheads)

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A profit and loss statement's primary purpose is to display an entity's overall profitability (financial performance). 

What is a balance sheet?

A balance sheet lists an entity's assets, liabilities and equity at a selected date.

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The primary purpose of a balance sheet is to display what an entity owns and owes (financial health).

See our other free bookkeeping and accounting courses

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Recommended Course: Management Accounts Course

Recommended Course: The ULTIMATE Bookkeeping Course
*Recommended Book: Bookkeeping and Accounting for Dummies*​

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Learn Bookkeeping

Ready to take bookkeeping more seriously?

Take bookkeeping and accounting to the next level by enrolling in the Bookkeeping Master's Ultimate Bookkeeping Course

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Gain a certificate of completion 

Learn bookkeeping and accounting for limited companies

Learn how to create year-end accounts

Learn advanced accounting principles

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