Reference fixture — not teaching material
This lesson exists to exercise the platform. It was not written by a subject-matter expert and has not been reviewed by one. Do not study from it.
Every transaction has two sides
By the end: Identify both accounts affected by a plain-language transaction.
Because the accounting equation must hold, no transaction can touch a single account. If cash goes down, something else must move to keep both sides equal — an asset arrived, a liability was settled, or an expense was incurred. Finding both sides is the core reading skill of bookkeeping, and it is worth practising before any of the mechanics arrive.
Ask two questions of every transaction. What did the business get? What did it give up, or take on, to get it? The answers name your two accounts.
- Bought $400 of cleaning supplies with cash → Supplies (asset, up) and Cash (asset, down).
- Cleaned an office and was paid $1,200 immediately → Cash (asset, up) and Service Revenue (revenue, up).
- Cleaned an office and invoiced $1,200 on 30-day terms → Accounts Receivable (asset, up) and Service Revenue (revenue, up).
- Received a $300 electricity bill, not yet paid → Utilities Expense (expense, up) and Accounts Payable (liability, up).
- Paid staff wages of $2,000 → Wages Expense (expense, up) and Cash (asset, down).
Compare the second and third lines carefully. The work is identical and the revenue is identical; only the timing of the money differs. Under the rules you will learn in Module 4, revenue is recorded when the work is done, not when the cash arrives. That single idea separates accounting from simply watching a bank account, and it is the reason a profitable business can still run out of money.