Thinking of the Balance Sheet as a Wallet

Non-bookkeepers tend to focus on income and expenses and ignore the Balance Sheet accounts (assets, liabilities, and equity). This can lead to all sorts of problems, like overdrawn bank accounts, unpaid bills, duplicated transactions, understated income, understated expenses, and more.

I find that it can be helpful to think of your Balance Sheet accounts as different pockets within the same wallet. This video walks you through the concept.


 

Illustration of an analog numeric typewriter, superimposed on a paper chart of printed numbers.

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