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Module 8 of 10 12 min

Basic Accounting for Founders

Tracking money in and out, and keeping business money separate.

Course lessons

Step 1

The lesson

Accounting is how you know whether your business is working. Without it, you're guessing.

  • Track every dollar in and out, with the date and what it was for.
  • Keep receipts — photos in a folder work.
  • Separate business money from personal money, even if it's just a separate account or envelope.
  • Review monthly: revenue, costs, profit, and cash on hand.

A simple ledger — a spreadsheet with date, description, money in, and money out — is enough for most student businesses.

Step 2

See it

Marcus's ledger summary for OctoberHypothetical example

In October, Marcus earned $744 from 62 cleans. He spent $310 on cleaning supplies and laces, $150 on a market booth, and $40 on ads. Profit was $244.

Revenue: 62 cleans at $12
$744
Cleaning supplies and laces
−$310
Weekend market booth
−$150
Social media ads
−$40
Profit for October
$244

Step 3

Real-world example

Why Marcus's bank balance didn't match

At the end of October, Marcus's ledger showed $244 in profit — but his business account had only $150 more than at the start of the month. What happened?

  • Six Clean Club members prepaid in September, so that cash had arrived the month before.
  • He bought extra cleaning supplies in bulk for November.
  • He'd paid himself $40 from the business account for a personal expense — which is exactly why separate accounts and clear records matter.

Profit and cash tell different stories. The ledger is what lets him understand both.

Step 4

Knowledge check

Answer each question, then check your answer to see the explanation. Retake it as many times as you like.

Question 1 of 3

Multiple choiceWhy keep business money separate from personal money?

Choose an answer.

Step 5

Summary

Track every dollar in and out, keep receipts, separate business and personal money, and review monthly. A simple ledger works. Business income can be taxable — net self-employment earnings of $400 or more generally require filing — and minors may need an adult for accounts and apps.

Step 6

What you should remember

  • Track every dollar with a simple ledger.
  • Keep receipts.
  • Separate business and personal money.
  • Profit ≠ cash.
  • $400+ in net self-employment earnings generally means filing a tax return.

Finished the lesson?

Mark it complete to track your progress.