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BOOKKEEPING-BASICS4 MIN READ

Sort P&L vs Balance Sheet Effects

Classify transactions by whether they affect the P&L, balance sheet, or both.

Mostly P&L Mostly balance sheet Both P&L and balance sheet Monthly office rent paid Software subscription for the current month Owner draw from checking Loan principal repayment Customer deposit before work is delivered Invoice issued for completed work Inventory sold to a customer Monthly prepaid insurance adjustment

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