Record a week of transactions | Bookkeeping Basics

Sam starts a tutoring business. Record each transaction with a debit and a credit, then check that the accounting equation balances.

#	Transaction	Amount
1	Sam deposits personal savings into a new business bank account	$500
2	Buys a whiteboard for the business with the business debit card	$60
3	Tutors 4 students at $30 each, paid by e-transfer	$120
4	Pays the monthly fee for scheduling software	$25
5	Invoices a family for 3 sessions, due next week	$90

Your steps

6 steps

Write the debit account and the credit account for each of the five transactions.
Check that the debit equals the credit for each one.
Work out the ending cash balance.
Add up total assets.
Calculate Sam's profit for the week using accrual accounting.
Confirm that Assets = Liabilities + Equity.

Check your answers

#	Debit	Credit	Amount
1	Cash	Owner's capital	$500
2	Equipment	Cash	$60
3	Cash	Tutoring revenue	$120
4	Software expense	Cash	$25
5	Accounts receivable	Tutoring revenue	$90

Cash: $500 − $60 + $120 − $25 = $535.

Total assets: $535 cash + $90 receivable + $60 equipment = $685.

Profit: $210 revenue − $25 expenses = $185.

Liabilities and equity: $0 liabilities + $500 capital + $185 profit = $685. The equation balances.

Habits that save hours

Open a separate bank account for the business, keep every receipt, record transactions weekly and compare your records with your bank statement each month. That monthly comparison is called a bank reconciliation.

Free template: Monthly Cash Flow TemplateUse it alongside this activity, or keep it for later.

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