Week 6 Day 4 Action Items

Day 4

• [ ] Practice recording a few daily transactions in your ledger or accounting software.
• [ ] Identify any areas where you might need additional guidance.

The Importance of Understanding Accounting Fundamentals

Sharing everything about categorizing transactions can not efficiently be wrapped into one day of discussion. Having a basic understanding of categorizing transactions correctly is a skill developed over time beginning with an understanding of accounting fundamentals. You can read more about the importance of accounting fundamentals here: Importance of Accounting

Checklist of Basic Transactions

This checklist of basic transactions is a good starting place on what to learn to be able to self-manage your accounting record.

1. Sales and Invoicing:
   • [ ] Record sales transactions.
   • [ ] Create and manage customer invoices.
2. Expenses:
   • [ ] Enter bills and invoices from suppliers.
   • [ ] Record payments for goods and services.
3. Bank Transactions:
   • [ ] Log deposits and withdrawals.
   • [ ] Log bank transfers.
4. Payroll:
   • [ ] Record employee salaries.
   • [ ] Account for payroll taxes and deductions.
5. Assets:
   • [ ] Record the purchase of assets.
   • [ ] Depreciate assets over time.
6. Loans:
   • [ ] Record loan proceeds and repayments.
7. Equity:
   • [ ] Record contributions and withdrawals by owners.
8. Tax:
   • [ ] Account for sales tax on sales transactions.
   • [ ] Record income tax payments.