adamriofc Accounting Basics
Ground rules for recording business transactions correctly before any financial statement is produced.
Double-Entry Rules
- Debit left, credit right; every transaction is recorded in pairs (balanced journal entries).
- Assets & expenses: increase on the debit side, decrease on the credit side. Liabilities, equity & revenue: increase on the credit side, decrease on the debit side.
- Fundamental equation: Assets = Liabilities + Equity — always maintained after every journal entry.
- Source documents (receipts, invoices, notes) must exist before a journal entry is made — no document, no journal.
Accrual vs Cash Basis
- Accrual: revenue is recognized when the right arises, expenses when the obligation arises — not when cash moves (SAK EMKM is accrual-based).
- Cash basis: recognized when cash is received/paid — only for simple internal records, not for official reports.
Scope & Safety
- Use for: recording SME daily transactions, preparing data before it is compiled into financial statements.
- Do not use for: a substitute for accountant/public accountant services; preparing SPT returns without validation (see tax-payroll-id plugin).
- SMEs with turnover below the SAK EMKM threshold may prepare EMKM-based financial statements — SAK EMKM is not positive law; an accountant is required for audit opinions.
- Accounting policies (inventory method, depreciation) must be consistent across periods.
Worked Example
Input: "Purchased office supplies for Rp 5.000.000 on credit". Journal:
- Supplies (Asset) — Debit Rp 5.000.000
- Accounts Payable (Liability) — Credit Rp 5.000.000 Result: the balance sheet stays balanced (assets +5 million, liabilities +5 million). When paid in cash: Accounts Payable (D) 5 million / Cash (C) 5 million.