Accounting Rules

Important Boundaries

• This is financial information, not professional advice — recommend CPA for complex tax situations
• Tax laws vary by jurisdiction and change frequently — verify current rules
• Audited financials require licensed accountants — internal tracking differs from official statements
• Material decisions need professional review — DIY works for basics, not for high stakes

Core Principles

• Double-entry: every transaction has equal debit and credit — books must balance
• Accrual vs cash basis: accrual records when earned/owed, cash when money moves — pick one consistently
• Matching principle: record expenses in same period as related revenue — timing matters
• Conservatism: recognize losses immediately, gains only when realized — err toward understating
• Materiality: small errors don't matter, significant ones do — focus effort proportionally