Bookkeeping Foundation Terms
Double-Entry Bookkeeping: How Debits & Credits Actually Work
Double-entry bookkeeping records every transaction with two equal sides (debits and credits) that must always balance.
12 min
Current work
SDO CPA LLC
Experience
18 years of experience
Bobby Huang is a partner at SDO CPA. 18 years of hands-on bookkeeping. He still reconciles real client books and built Growthy from the same review-and-approve work bookkeepers do each week.
Published Articles
Double-Entry Bookkeeping: How Debits & Credits Actually Work
Bank Reconciliation: What It Is, Why It Matters, How to Do It
Balance Sheet Terms
Bank Reconciliation: What It Is, Why It Matters, How to Do It
Bank reconciliation matches your book balance to the bank statement balance, line by line. It's the single best fraud-detection tool a bookkeeper has, and the QBO Reconcile workflow takes about an hour a month when the books are clean.
12 min
What Category Is Bank Fees & Interest? (Chart of Accounts Guide)
Chart of Accounts
What Category Is Bank Fees & Interest? (Chart of Accounts Guide)
Bank fees and interest split into three accounts, not one: Bank Service Charges, Interest Expense, and Merchant Processing Fees. The biggest error is booking net Stripe deposits, which understates revenue every month.
13 min
What Category Is Software & Subscriptions? (Chart of Accounts Guide)
Chart of Accounts
What Category Is Software & Subscriptions? (Chart of Accounts Guide)
SaaS goes in Software Subscriptions. Memberships and trade publications go in Dues & Subscriptions. Small one-off tools under $50/year go in Office Expenses. Three accounts, one decision tree, no more guessing where Slack goes.
10 min
What Category Is Rent & Utilities? (Chart of Accounts Guide)
Chart of Accounts
What Category Is Rent & Utilities? (Chart of Accounts Guide)
Rent and utilities sit in two separate Operating Expense accounts. Home office allocation usually doesn't get its own COA line, security deposits hit Other Assets (not expense), and CAM charges roll into Rent, not Utilities.
12 min
What Category Is Meals & Entertainment? (Chart of Accounts Guide)
Chart of Accounts
What Category Is Meals & Entertainment? (Chart of Accounts Guide)
Meals belong in a 50% deductible expense account. Entertainment belongs in a separate 0% deductible account. For TY2026, OBBBA eliminated employer-convenience meal deductions, so team meal categorization changed too.
12 min
What Category Is Marketing & Advertising? (Chart of Accounts Guide)
Chart of Accounts
What Category Is Marketing & Advertising? (Chart of Accounts Guide)
Marketing and advertising costs go to Marketing & Advertising Expense, combined or split depending on volume.
11 min
What Category Is Contractor Payments (1099)? (Chart of Accounts Guide)
Chart of Accounts
What Category Is Contractor Payments (1099)? (Chart of Accounts Guide)
Contractor payments go to Outside Services or Contract Labor, an Operating Expense account separate from W-2 payroll. The 2026 OBBBA rules raised the 1099-NEC threshold to $2,000, and credit-card payments don't count.
11 min
What Category Is Business Insurance? (Chart of Accounts Guide)
Chart of Accounts
What Category Is Business Insurance? (Chart of Accounts Guide)
Business insurance goes to Insurance Expense, usually one parent account with optional sub-accounts by policy type. Annual premiums paid upfront sit in Prepaid Insurance and amortize monthly. S-corp owner health insurance follows special W-2 rules.
12 min
What Category Is Attorney / Lawyer Fees? (Chart of Accounts Guide)
Chart of Accounts
What Category Is Attorney / Lawyer Fees? (Chart of Accounts Guide)
Routine attorney fees go to Legal Fees (a sub-account of Professional Fees). Acquisition, formation, real estate, and IP legal work gets capitalized instead. Plus the attorney 1099 exception every bookkeeper misses.
10 min
Accrual vs Cash Accounting: Which Method and Why It Matters
Tax Bookkeeping Terms
Accrual vs Cash Accounting: Which Method and Why It Matters
Cash accounting recognizes revenue and expenses when money moves. Accrual recognizes them when earned or incurred. Most small businesses run cash for tax and accrual for books. Here's why and how.
11 min
Accounts Receivable: What It Is & How Bookkeepers Manage AR
Bookkeeping Terms Glossary
Accounts Receivable: What It Is & How Bookkeepers Manage AR
AR is money customers owe for work delivered. Here's the full lifecycle bookkeepers manage: invoicing, payment application, aging, and write-offs.
9 min
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