Understanding Accounting Entries

Acusheet uses double-entry bookkeeping — the international standard for accounting. Every transaction automatically creates balanced entries across two or more accounts. You don't need to be an accountant to use Acusheet, but understanding the basics helps you read your reports with confidence.

---

The Core Principle: Every Transaction Has Two Sides

When money moves, it comes from somewhere and goes to somewhere. In accounting, we call these debits and credits.

	Debit (Dr)	Credit (Cr)
Assets	Increases ↑	Decreases ↓
Liabilities	Decreases ↓	Increases ↑
Equity	Decreases ↓	Increases ↑
Income	Decreases ↓	Increases ↑
Expenses	Increases ↑	Decreases ↓

The golden rule: Total Debits always equal Total Credits.

---

What Acusheet Does Automatically

You never need to create journal entries manually for standard transactions. Here's what happens behind the scenes:

Approving an Invoice

Account	Debit	Credit
Accounts Receivable	Invoice total	—
Sales	—	Net amount
Tax and Duty	—	Tax amount

Recording Payment on an Invoice

Account	Debit	Credit
Bank Account	Payment amount	—
Accounts Receivable	—	Payment amount

Approving a Bill

Account	Debit	Credit
Expense Account	Net amount	—
Tax and Duty	Tax amount	—
Accounts Payable	—	Bill total

Paying a Bill

Account	Debit	Credit
Accounts Payable	Payment amount	—
Bank Account	—	Payment amount

Recording an Expense

Account	Debit	Credit
Expense Account	Amount	—
Bank / Cash Account	—	Amount

---

Viewing Accounting Entries on Any Document

On any approved invoice, bill, expense, or voucher, scroll to the Accounting Entries section on the right sidebar. You'll see the exact accounts debited and credited for that transaction.

---

Foreign Exchange Entries

When transactions are in a foreign currency, an additional exchange gain or loss entry may be posted if the exchange rate at payment differs from the rate at the time of the invoice.

• Exchange Gain — You received more than expected in your base currency
• Exchange Loss — You received less than expected in your base currency

These post automatically to the Foreign Exchange Gain/Loss accounts.

---

Frequently Asked Questions

Do I need to understand double-entry to use Acusheet?
No. Acusheet handles all the journal entries automatically when you create invoices, bills, payments, and expenses. Double-entry knowledge helps you understand your reports, but it's not required for day-to-day use.

What if an entry looks wrong?
Go to the document (invoice, bill, etc.) and check it's approved correctly. If the entry is wrong, edit the document. For adjustments that can't be done through documents, use a Journal Entry.

Why do some accounts increase with a debit and others with a credit?
It's a convention established centuries ago. Assets and expenses increase with debits. Liabilities, equity, and income increase with credits. This is why paying your bank account (an asset) with a debit increases it, while a credit card (a liability) credit increases what you owe.