Double-Entry Bookkeeping
How debits, credits, and journal entries work in Anchor.
Double-entry bookkeeping is the foundation of modern accounting. Every transaction records at least two entries: a debit and a credit. The total debits must always equal the total credits, keeping your books balanced.
Debits and Credits
| Account Type | Debit | Credit |
|---|---|---|
| Assets | Increase | Decrease |
| Liabilities | Decrease | Increase |
| Equity | Decrease | Increase |
| Revenue | Decrease | Increase |
| Expenses | Increase | Decrease |
Journal Entries
A journal entry is the record of a single transaction. In Anchor, every financial action (invoice, bill, payment, expense) creates a journal entry automatically.
Example: Recording a Sale
When you issue a $1,000 invoice:
| Account | Debit | Credit |
|---|---|---|
| Accounts Receivable | $1,000 | |
| Sales Revenue | $1,000 |
When the customer pays:
| Account | Debit | Credit |
|---|---|---|
| Bank Account | $1,000 | |
| Accounts Receivable | $1,000 |
The Accounting Equation
Assets = Liabilities + Equity
Every transaction maintains this equation. Anchor enforces balance by requiring total debits to equal total credits on every journal entry.
Manual Journal Entries
For transactions that are not covered by invoices, bills, or expenses, you can create manual journal entries in Accounting > Transactions.
See Journal Entries for details on creating and managing entries in Anchor.
Accounting Concepts
Accounting principles behind Anchor: double-entry, chart of accounts, cash versus accrual, and bank reconciliation for South African small businesses.
Chart of accounts concepts
What a chart of accounts is, the five account types, and how Anchor uses that structure on invoices, VAT, and reports for SA small businesses.