Improve Your Bookkeeping System Although you might make use of a single-entry bookkeeping system, double-entry bookkeeping is the usual method of keeping business records.

The bookkeeper (most likely you, for your first few years inbusiness) enters transactions first in a journal, and then postsmonthly totals to the appropriate ledger accounts. Five categoriesof ledger accounts are: 1) income; 2) expense; 3) assets; 4)liability; and 5) net worth. Income and expense accounts are closedeach year; assets, liability and net worth accounts are maintainedon a permanent and continuous basis.

Excerpted from Starting a Home-based Business