How Double-Entry Records Your Transactions

You don’t need to write journals for your everyday work. Double-Entry posts every invoice, bill, payment, transfer and expense to your chart of accounts as you record it, and shows you the result on the record itself.

What Gets Posted Where

When you record	Debit	Credit
An invoice	Accounts Receivable, for the total	The income account of each line, and the tax account of each tax
A payment for an invoice	The bank account it was paid into	Accounts Receivable
A bill	The expense or asset account of each line, and the tax account of each tax	Accounts Payable, for the total
A payment for a bill	Accounts Payable	The bank account it was paid from
An income transaction	The bank account	The account picked as its category
An expense transaction	The account picked as its category	The bank account
A transfer	The account the money went to	The account the money came from

Discounts on invoices and bills are posted to the sales discount and purchase discount accounts.

Note: A draft or cancelled invoice or bill doesn’t count in your reports. It counts once it’s sent or received, and stops counting if you cancel it.

Choosing the Accounts

• Items: each item has an Income Category for sales and an Expense Category for purchases. These accounts are used whenever you add the item to an invoice or a bill.

• Invoice and bill lines: each line takes the account of its item. To post one line to another account, click Edit Category under the line and pick it.
• Invoices and bills themselves: the Category field is hidden. Invoices are always posted to Accounts Receivable, and bills to Accounts Payable.
• Income and expense transactions: the Category field lists your chart of accounts with each account’s code and type, so you can post a transaction to any account, such as a loan, an equity account or a fixed asset. Bank and cash accounts, depreciation accounts, Accounts Receivable and Accounts Payable aren’t listed, because Akaunting posts to them on its own.

Seeing the Debits and Credits

Open any invoice, bill or transaction and expand Journals. You’ll see each account it was posted to, with the debit and credit amounts.

Accrual and Cash Basis

Every Double-Entry report can be shown on either basis:

• Accrual counts income and expenses when you send an invoice or receive a bill, whether it’s paid or not. It includes all your manual journals.
• Cash counts only the money that has moved: payments and other bank transactions, and the manual journals marked as Cash.

Switch between them with Basis at the top of each report.