It is beyond the scope of this manual to teach accounting and accounting methods.  The following is for informational purposes only.  Consult with your account for specific advice.

Double Entry Accounting

•The total of all transactions must balance  This does not mean there must be a credit for every debit - only that all of the entries must add up to zero (balance).

•When all of the transactions for the accounting period have been posted, the Posting Total on the Transaction screen should be zero.

•In Medlin Accounting

•Entries made on the Journal Entry screen MUST balance.  This is the one entry screen where you must make both the debit and credit entries.

•Entries made on the Checks and Deposit screen are one sided.  The offsetting entry to your bank account is handled by the software

•Entries made on the Invoices screen are one sided.  The offsetting entry to your bank account is handled by the software, when the invoice is paid.

Technical Notes and Tips

•Give Double Entry Accounting a try.  It is not hard, and will provide much better reporting.

•To show the most detail, enter each check, deposit, and adjustment as two items - one negative and one positive.  If you are posting checks as they happen, this is the best method.

•If you enter all the monthly checks in a single batch, you might choose to enter all the checks (the positive entry) as "one-sided" transactions to the expense accounts; then after the last check has been entered, make a single negative entry to the bank account, by using "NetCk" in the Check Number field.

•A simple and almost fail proof way to know which entries are positive and which are negative is to think about what the item is going to do to the bank balance.  If the bank balance is not affected, think of another account.

•Expenses - Lowers your bank balance - A negative entry to your bank account and a positive entry to an expense account.

•Income - Increases your bank balance - A positive entry to your bank account and a negative entry to an income account.

•Recording a Loan Received - Increases your bank account - A positive entry to your bank account and a negative entry to a loan payable account.

•Paying a Loan / Payables - Lowers your bank balance - A negative entry to your bank account and a positive entry to the Loan/payable account.

•Property / Equipment Acquired - Increases your assets - A positive entry to an asset account and a negative entry, or combination of entries, to your bank account and/or loan payable account.

•Depreciation - Increases your expenses - A positive entry to an expense account and a negative entry to a depreciation or amortization account.

•Owner Withdrawals - Decreases the company bank balance - A negative entry to the bank account and a positive entry to the withdrawal account.

•If using Accrual Accounting

•Collecting Sales Tax - Increases (temporarily) your bank balance - A positive entry to your bank account and a negative entry to the Sales Tax Payable account.

•Paying Sales Tax - Decreases your bank balance - A negative entry to your bank account and a positive entry to the Sales Tax Payable account.

•Payroll Withholding - Increases your payroll expense - A positive entry to your payroll expense account and a negative entry to a payroll tax payable account.

•Remitting Payroll Taxes - Lowers your bank balance - A negative entry to your bank account and a positive entry to a payroll tax payable account.