Accounting, from 0 to 1.
- Lessons
- 13
- Reading
- 128 min
- Exercises
- 7
- Terms taught
- 78
- Sources quoted
- 15
Northwind Traders, Inc.
Two founders put $60,000 into a company that buys tools and sells them on. It opened on 1 September 2026 and it has never had a period before, so every opening balance is zero and every number on the page can be traced back to something that happened.
- Revenue
- 31,500.00
- Net income
- 2,550.00
- Total assets
- 72,000.00
- Operating cash flow
- (3,100.00)
- Trial balance
- Ties
Northwind made a profit and its operations consumed cash. Both figures are correct, and understanding why is the thing this course is actually for.
One loop, run once a month
Each lesson is a stage of the same cycle. By the last one you have run all seven on a real set of books.
The thirteen lessons.
- 01Why the books existBookkeeping is not record-keeping for its own sake. It is a system built so that an error announces itself and every figure traces back to an event.7 min
- 02The accounting equationAssets = liabilities + equity is not a formula you apply at period end. It is true after every single entry, and that is what makes the books provable.7 min
- 03Accounts, and the five typesEvery account belongs to exactly one of five types, and its type decides which side increases it. Get the type right and the entry writes itself.Exercise9 min
- 04Debits and creditsDebit means left and credit means right. Not good and bad, not plus and minus. Stop translating them into signs and everything else gets easier.Exercise8 min
- 05Recording the monthThirteen things happened to Northwind in September. Here is every one of them turned into an entry, with the reasoning that produced it.13 min
- 06Posting to the ledgerThe journal is in date order; the ledger is in account order. Posting is the re-sort, and it is what turns a list of events into a balance you can report.Exercise8 min
- 07The trial balanceEvery account, netted onto one side, with both columns summed. It proves the arithmetic, and you need to know exactly how much it does not prove.Exercise10 min
- 08Cash, accrual and cut-offCash accounting records when money moves. Accrual records when value moves. Every hard question in the rest of the course lives in the gap between the two.9 min
- 09Adjusting entriesThree entries nobody sends an invoice for, made on the last day of the month, that turn a record of transactions into a set of accounts.Exercise12 min
- 10The income statementTwo of the five account types, arranged so each subtotal answers a different question about how the month went.Exercise10 min
- 11The balance sheetThe other three account types, at one instant — and the single line where the month's profit lands, which is what ties the two statements together.10 min
- 12The cash flow statementNorthwind earned $2,550 and its operations consumed $3,100. The third statement is the one that explains the difference, line by line.Exercise12 min
- 13Closing the monthStatements are not the end. The close proves every balance against something outside the ledger, then locks the period so the numbers can't quietly change.13 min
Seven exercises you type into
Each one is the workbook's grid at the size of one idea: arrow keys, Enter, a formula, a block pasted out of Excel — with the check running underneath as you type. Nothing you enter leaves your browser.
- Sort eight accounts into five typesSet the type on every row. Two are traps: deferred revenue has the word revenue in it and is a liability, and accumulated depreciation carries a credit balance and is still an asset — a contra asset.
- Finish JE-4Northwind receives $18,000 of stock from a supplier on 30-day terms. The debit is written. Write the credit — and note that no cash account appears anywhere in this entry.
- Post every movement through CashNine entries touched cash in September. They are listed in date order with the amounts blanked from row four down — fill them in from the entries in this lesson and watch the running balance. The ledger should land on $32,900 at 30 September.
- This trial balance does not tieOne figure was typed wrong on the way in. Do not hunt line by line — read the difference first, then look only at the accounts that could produce it.
- Write the two schedules September needsThe van cost $24,000 and will serve 48 months, with nothing left at the end. The insurance cost $7,200 and covers 12 months. Each needs a schedule before it can become an adjusting entry — and each schedule has to sum back to what was paid, to the cent.
- Take the P&L accounts off the trial balanceOnly two of the five account types belong on an income statement. Copy each one's balance across — revenue as a credit, expenses as debits — and the sheet will tell you what Northwind earned.
- Walk $2,550 of profit to $32,900 in the bankStart at net income, add back what cost no cash, and take out what moved cash without touching profit. The walk is right when the total equals the change in the bank balance — and in a first month, the change is the balance.
Every rule names its standard
A course that teaches rules without saying whose rules they are is teaching an opinion. Each lesson cites the authority behind what it claims — and says plainly when a thing is a bookkeeping convention rather than a requirement, which several of them are.
15 of those citations were read and quoted rather than recalled. The full map — what is required by US GAAP, what is presentation convention, and what is simply mechanics — is in US GAAP, and where these rules come from.
See also
The course is the entrance. These are the rest of the system, and they use exactly the same words.
- GlossaryEvery term the course uses, defined once, with its authority.Term
- PlaygroundThe same grid, with four full sheets instead of one exercise.Tool
- ToolbeltThe calculators behind the exercises — schedules, differences, reconciliation.Tool
- Domain docsWhere the course stops and the specification starts.Doc