Vocabulary

These are the words that show up in the GL surface that will confuse you if you're not an accountant. Each entry is one sentence of definition + one sentence on why it matters to you.

Debit / Credit

A bookkeeping convention for which side of an entry money moves to. Why it matters: you don't need to remember which is which — Yoke Ledger handles the sides when you pick the right accounts. The terms come up when reading GL reports.

Accrual vs Cash

Two ways of recognizing revenue and expenses. Cash basis: when money moves. Accrual basis: when the obligation exists (you sent the invoice; the customer hasn't paid yet). Why it matters: accrual gives you a clearer picture of profit; cash is simpler. Most small businesses use cash; growing businesses graduate to accrual.

Asset / Liability / Equity / Revenue / Expense

The five account buckets. Why it matters: every transaction touches at least two of these. See which account does this go to?.

Trial Balance

A snapshot listing every account and its balance as of a date. Why it matters: if the debits and credits don't match, the books are broken. First thing your CPA will check.

General Ledger

The full record — every transaction, every debit, every credit. Why it matters: it's the receipts for the Trial Balance. Auditors and CPAs ask for it.

Journal Entry

A single bookkeeping record — one transaction, debit one account, credit another (or several), totals match. Why it matters: this is the atomic unit of your books.

Posting Rule

A template that creates journal entries automatically when a business event happens (sale, invoice, payment received). Why it matters: set them up once and your books update without you typing anything.

Chart of Accounts

The list of every account your business uses. Why it matters: you customize this to match how you think about your business. Bad CoA = bad reports.

AR / AP

Accounts Receivable (money customers owe you) and Accounts Payable (money you owe vendors). Why it matters: watching AR tells you who's slow to pay; AP tells you what's due.

COGS

Cost of Goods Sold. Why it matters: on your P&L, this is what it cost you to deliver what you sold. Revenue minus COGS is your margin.

Net Income vs Cash Flow

Profit is what you earned. Cash flow is what hit your bank account. Why it matters: you can be profitable and running out of cash (slow-paying customers), or unprofitable and cash-rich (loan came in). Watch both.

Reconciliation

Confirming your books and your bank statement agree. Why it matters: if they don't agree, your books are wrong. See month-end checklist.