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The lessons, by level
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Level 1 · 8 lessons · about 77 minutes
Foundations
The ideas every bookkeeper builds on: the accounting equation, the five account types, debits and credits, and how entries reach the reports.
- 1.1What accounting is (and how bookkeeping fits in)6 minExplain what accounting does, who uses the numbers, and where bookkeeping fits in.
- 1.2The accounting principles (GAAP)10 minName the main accounting principles and spot each one in a small-business example.
- 1.3The accounting equation9 minUse Assets = Liabilities + Equity to track how each transaction changes a business.
- 1.4The five account types and normal balances8 minSort any account into one of the five types and know its normal balance.
- 1.5The chart of accounts7 minRead a chart of accounts, understand its numbering and add an account in the right place.
- 1.6Debits and credits16 minUse the debit and credit rules to record any basic transaction so it balances.
- 1.7Journal entries and the general ledger13 minFollow a transaction from a journal entry to the general ledger and the reports.
- 1.8Cash basis vs. accrual basis8 minRead the same month on a cash basis and an accrual basis and explain why the numbers differ.
Level 2 · 12 lessons · about 121 minutes
Everyday bookkeeping
Recording the money that moves every day: sales, payments, bills, receipts, bank lines, sales tax and owner money.
- 2.1Sales and invoices9 minYou'll know when a sale counts as revenue, what an invoice does to the books, and how payment terms set the due date.
- 2.2Getting paid10 minYou'll record full and partial customer payments, handle deposits and credit memos, and read the AR aging report.
- 2.3Bills and accounts payable10 minYou'll record vendor bills, pay them, take early-payment discounts, use vendor credits and write checks.
- 2.4Receipts and supporting documents8 minYou'll know why every entry needs proof behind it, what to keep, and how to record and match a receipt.
- 2.5Bank and credit card transactions10 minYou'll categorize bank and card lines, spot transfers and matches, treat a credit card as a liability, and bring in a statement file.
- 2.6Bank reconciliation11 minYou'll explain why the bank and the books differ, work out adjusted balances, and reconcile an account in Leah Books.
- 2.7Sales tax9 minYou'll record sales tax you collect as a liability, tell taxable from non-taxable sales, and record paying the tax to the state.
- 2.8Owner money: contributions and draws10 minYou'll record money the owner puts in and takes out, keep personal and business money apart, and handle petty cash.
- 2.9Billing in depth: estimates, deposits and recurring invoices11 minYou'll take a job from estimate to invoice, hold a customer's deposit as unearned revenue until the work is done, and bill regular customers on a schedule.
- 2.10Credits, refunds, discounts, late fees and collections12 minYou'll handle overpayments, credit memos, refunds, early-payment discounts and finance charges, send statements, and work the AR aging to collect.
- 2.11Vendors in depth: credits, checks, recurring bills and 1099s11 minYou'll use vendor credits, write and print checks, set up recurring bills, read the AP aging and keep track of the vendors who need a 1099.
- 2.12Expenses, credit cards, reimbursements and petty cash10 minYou'll record spending by card and cash, pay back employees and owners for business costs, keep a petty cash fund and pay down the credit card.
Level 3 · 13 lessons · about 139 minutes
Closing the month and the year
Adjusting, checking and closing the books.
- 3.1The accounting cycle8 minName the nine steps that take a business from its first transaction of the month to a clean, closed set of books.
- 3.2The trial balance9 minRead a trial balance, explain what it proves, and spot the errors it can't catch.
- 3.3Adjusting entries: accruals and deferrals12 minRecord the four common month-end adjustments: accrued revenue, accrued expenses, prepaid expenses and unearned revenue.
- 3.4Fixed assets and depreciation11 minDecide when to capitalize a purchase, calculate straight-line depreciation, and read book value on the balance sheet.
- 3.5Bad debts10 minRecord customers who won't pay using the direct write-off and allowance methods, and estimate the allowance with an aging schedule.
- 3.6Payroll accounting12 minWork from gross pay to net pay, record the paycheck and employer taxes, and track payroll liabilities until they're paid.
- 3.7Closing entries and retained earnings10 minClose revenue, expense and draw accounts into retained earnings, and lock a finished period so it can't change.
- 3.8Internal controls, errors and the audit trail10 minUse segregation of duties, approvals, correcting and reversing entries, and the audit trail to keep the books trustworthy.
- 3.9Accruals and deferrals in depth, with reversing entries12 minYou'll record accrued revenue, accrued expenses, prepaid expenses and unearned revenue, and use reversing entries so nothing counts twice.
- 3.10Write-offs: small balances, recoveries, inventory and assets11 minYou'll write off what won't be collected or used, record a recovery when a written-off customer pays, and handle inventory shrinkage and asset disposals.
- 3.11Loans, clearing and suspense accounts, and reconciling the balance sheet12 minYou'll split loan payments into principal and interest, keep clearing and suspense accounts at zero, prove every balance sheet account and fix errors the right way.
- 3.12Payroll in depth: liabilities, deposits and tax forms12 minYou'll follow payroll from the paycheck to the tax deposit and the quarterly and year-end forms, and track PTO and other payroll liabilities.
- 3.13Inventory and cost of goods sold10 minYou'll explain perpetual and periodic inventory, cost goods with FIFO and average cost, and record inventory and cost of goods sold in Leah Books with a count and an adjusting entry.
Level 4 · 10 lessons · about 130 minutes
Reading and using the numbers
Financial statements, analysis and advanced topics: read the four statements, measure performance with ratios, plan with budgets and cost behavior, and get ready for year end.
- 4.1The income statement (P&L)12 minRead a multi-step income statement from revenue down to net income and explain what each subtotal tells you.
- 4.2The balance sheet12 minRead a classified balance sheet, separate current from long-term items, and show how it ties to the accounting equation and to retained earnings.
- 4.3The statement of cash flows14 minBuild a statement of cash flows with the indirect method, starting from net income, and explain why profit and cash are different.
- 4.4Owner's equity, retained earnings and how the statements connect10 minPrepare a statement of owner's equity and a retained earnings statement, and trace how the four financial statements link to each other.
- 4.5Ratio analysis15 minCalculate and interpret liquidity, profitability, efficiency and leverage ratios from one set of financial statements.
- 4.6Budgeting and variance analysis12 minCompare actual results with a budget, label variances favorable or unfavorable, and use a flexible budget to separate volume from performance.
- 4.7Managerial accounting: costs, contribution margin and break-even13 minSeparate fixed and variable costs, calculate contribution margin, and find the break-even point and margin of safety for a service.
- 4.8Overhead, cost pools and activity-based costing11 minYou'll tell direct costs from overhead, group shared costs in a cost pool, pick a cost driver, allocate overhead to jobs or locations, and see how activity-based costing refines it.
- 4.9Year-end and tax basics13 minKnow which year-end forms a small business prepares, why book income and taxable income differ, and how entity type changes the tax return.
- 4.10The full cycle: one month and year-end, start to finish18 minYou'll follow one company through a whole month, from the first invoice to the locked books, and then through the year-end close, in the order a bookkeeper does it.
Practice in your own books
Every lesson has a "Try it in Leah Books" part you do in your own Leah Books. Turn on Test mode first (Practice in test mode, at the bottom of the menu) and nothing you try reaches your real books.