01-05-2016, 10:56 AM
Okay. I've been googling a bit and the general idea has become a bit more clear:
Some definitions. Accounting is also known as 'book keeping'. You may ask: "which book is this?". Well, it's the General Ledger. That's the book. In the General Ledger every transaction will be noted, as a journal. The General Ledger contains multiple General Ledger Accounts. Each GLAccount has a specific number prefix. For instance, Revenue will always start with the number 8. You can subcatergorize in this. Let's say you sell furniture, you could have GLAccount 801 for chairs, and 802 for tables. Now let's say you sell a table with 4 chairs. The selling value of the table will be added to GLAccount 802, the selling value of the 4 chairs will be added to 801. Each of these additions (or subtractions) is a Journal Post. There are also GLAccounts for stock. In the previous example, The tables and chairs will be booked from stock to Revenue. Of course there will be a difference between these, the profit margin, since the stock value was the value you purchased these for. I'm not sure yet if the difference should be booked on a Profit GLAccount in this example. I do know that every journal post should be balanced. So if you take 100 from one GLAccount, you should add the same amount to another.
I will keep searching to better understand the Accounting rules, if anyone can clarify further, help is welcome.
Some definitions. Accounting is also known as 'book keeping'. You may ask: "which book is this?". Well, it's the General Ledger. That's the book. In the General Ledger every transaction will be noted, as a journal. The General Ledger contains multiple General Ledger Accounts. Each GLAccount has a specific number prefix. For instance, Revenue will always start with the number 8. You can subcatergorize in this. Let's say you sell furniture, you could have GLAccount 801 for chairs, and 802 for tables. Now let's say you sell a table with 4 chairs. The selling value of the table will be added to GLAccount 802, the selling value of the 4 chairs will be added to 801. Each of these additions (or subtractions) is a Journal Post. There are also GLAccounts for stock. In the previous example, The tables and chairs will be booked from stock to Revenue. Of course there will be a difference between these, the profit margin, since the stock value was the value you purchased these for. I'm not sure yet if the difference should be booked on a Profit GLAccount in this example. I do know that every journal post should be balanced. So if you take 100 from one GLAccount, you should add the same amount to another.
I will keep searching to better understand the Accounting rules, if anyone can clarify further, help is welcome.