Accounting Relationships Chart

Accounting Relationships Chart

Below is a table showing the relationships between the various types of accounts for an Accounting system.  Use it as a VERY concise quick reference guide in making ledger entries and while assigning the various General Ledger accounts. 

It can also be used to guide in the assigning a correct type of account to inventory items and other system entries to get the proper "offset" for correctly setting up the real time posting for financial reporting and audit trail purposes. 

Understanding the following table is ALL you really need to know to do your own bookkeeping and accounting with a system like KwikOFFICE™ REPAIR SHOP.  

Basically the above table shows (at the table's vertical and horizontal intersecting point of the general ledger account type names used during a ledger entry transaction) whether an addition or subtraction takes place when a particular pair of account types are used together in the automatic real time (background) accounting process built into KwikOFFICE™ REPAIR SHOP and/or also while the operator is making manual ledger entries.   This chart can also be used to determine what happens during the process of making an "off-setting" entry so that the "books" are kept "in balance". 

For instance:

An Asset gets added to an Asset

An Asset gets subtracted from a Liability

An Asset gets subtracted from Equity

An Asset gets added to Income

An Asset gets subtracted from an Expense

Etc……

NOTE:  The Chart Of Accounts MUST be set up correctly (including their naming convention) for all of the the automatic and manuall ledger processing to function correctly.  A generic Chart of Accounts is supplied with KwikSALES™ MANAGER so you can see how it should be done for your business.  It can be modified to fit your unique business conditions/work habits/scenario.