Basic Accounting Principles & Bookkeeping

Bookkeeping is the ongoing recording of every financial transaction — the foundation every other financial task builds on. Without accurate records, budgets, reports, and tax filings are all guesswork.

• Income vs expenses: Every transaction is either money coming in (income/revenue) or money going out (expenses).
• Assets vs liabilities: Assets are what a business owns (cash, equipment, stock); liabilities are what it owes (loans, unpaid bills).
• Recording every transaction: Date, description, amount, and category — recorded as it happens, not reconstructed from memory later.
• Separate business and personal money: Mixing personal and business finances is one of the most common causes of confused, unreliable records.

Practical Skill: Set up a simple daily bookkeeping log and record 10 realistic sample transactions for a small business, correctly categorizing each as income or expense.

=== DAILY BOOKKEEPING LOG === Date        Description              Type      Amount (SSP)2026-03-01  Sold 5 shirts            Income        15,0002026-03-01  Bought fabric            Expense        6,0002026-03-02  Transport to market      Expense        1,5002026-03-02  Sold 2 dresses           Income        12,000 Rules to follow:[ ] Record every transaction the same day it happens[ ] Never mix personal spending into the business log[ ] Keep the physical receipt or a photo of it where possible[ ] Total income and expenses weekly to track your position