Accounting fundamentals in KontoCore
How double-entry, the general ledger, debits and credits, and accrual versus cash basis work — in plain English.
- Plans
- Core and above
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- Available
- For
- Owners, Bookkeepers, Accountants
- In KontoCore
Accounting
In plain English
Every transaction has two sides: where the value came from and where it went. A debit and a credit are simply the names for those two sides. They always balance.
What this does
Every invoice, bill, payment, and bank categorization posts a balanced journal entry. You rarely write debits and credits yourself — the workflows do it — but understanding them explains every report.
Reports can be run on accrual or cash basis without re-entering data.
| Term | What it means |
|---|---|
| Debit | Left side. Increases what you own (assets) and what you spend (expenses). |
| Credit | Right side. Increases what you owe (liabilities), what you earned (revenue), and owner equity. |
| General ledger | The full record of every posted line, by account. |
| Trial balance | Every account’s balance on one page — debits equal credits. |
More plain-language help in KontoGuide and the Glossary.
Chart of accountsOrganize accounts by type, add or rename accounts, use sub-accounts, and deactivate accounts safely.Journal entriesWhen and how to record a manual journal entry, including adjusting entries and reversals.Fixed assets and depreciationCapitalize equipment and other long-lived purchases and record depreciation over their useful life.Period close and opening balancesClose months and years, control reopening, and enter opening balances when starting clean.General ledgerBrowse every posted entry by account and date, drill from balances to source documents, and understand how each transaction reached the ledger.Opening balancesEnter starting balances as of your conversion date — bank, receivables, payables, inventory, fixed assets, loans, and equity — and verify they tie to your prior books.Fiscal periods, close, and reopenSet your fiscal year, close months and years so posted history can’t change, and reopen a period with a recorded reason when a correction is necessary.Recurring journal entriesSchedule balanced journal entry templates monthly, quarterly, or yearly; each run creates a draft entry for review, with duplicate-period protection.
The rules at a glance
| Account type | Increase with | Decrease with | Report |
|---|---|---|---|
| Asset | Debit | Credit | Balance sheet |
| Liability | Credit | Debit | Balance sheet |
| Equity | Credit | Debit | Balance sheet |
| Revenue | Credit | Debit | Profit & loss |
| Expense | Debit | Credit | Profit & loss |
What happens in your books
Buying a $2,000 laptop with cash moves value from one asset to another — no expense yet:
| Account | Debit | Credit |
|---|---|---|
| Equipment (asset) | 2,000.00 | |
| Checking (asset) | 2,000.00 |
Terms used:DebitCreditDouble-entry bookkeepingGeneral ledger (GL)Trial balanceAccrual basisCash basis
Related articles
Chart of accountsOrganize accounts by type, add or rename accounts, use sub-accounts, and deactivate accounts safely.Journal entriesWhen and how to record a manual journal entry, including adjusting entries and reversals.ReportsWhat the profit and loss, balance sheet, cash flow, and aging reports tell you — and how to drill into source records.KontoGuide: in-product guidancePlain-language explanations, step-by-step guidance, and checks that help you record transactions correctly — adjustable per user and per company.GlossaryAccounting and KontoCore terms explained in plain language.
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Last reviewed September 25, 2026