Master the four key accounting concepts and use a single tool to manage your business, property, and personal finances—all in one place.

‍Why Understanding Accounting Basics Matters

You don’t have to be an accountant to keep track of your finances.  Whether you are managing a business, investing in property, or handling personal expenses, understanding some key accounting terms can help you stay organised and informed.

In this guide, you’ll explore four simple but powerful accounting concepts, income, expenses, assets, and liabilities, and how they work together to give you a clear picture of your overall financial position and net wealth.  You will also learn how the Myaccountant app can help you record and view these numbers all in one place.

The 4 Basic Accounting Concepts ‍

Below, you will find a simple explanation of each of the four key accounting concepts.  These are the building blocks commonly used to track and understand how money moves in and out of your life.

1. Income – Money Coming In

Income is the money you receive. It can come from different sources depending on your situation, such as:

• Salary or wages if you’re employed.
• Sales revenue if you run a business or work for yourself.
• Rental income from investment properties.
• Interest from savings accounts or fixed deposits.

Tracking your income gives you a clear picture of how much money is coming in each week or month. It helps you see what’s available to cover your regular expenses like bills, groceries, or rent. It also shows if there’s anything left over, often called a surplus, which can be put toward savings, a future purchase, or other financial goals.

Without knowing your income, it’s hard to manage your spending or feel in control of your money.

2. Expenses – Money Going Out

Expenses are the costs you pay to live your life or run a business.  They can be regular, one-off, or occasional. Common examples include:

• Groceries, rent, utility bills, or fuel for daily living
• Wages and office rent if you operate a business
• Maintenance or agent fees for managing a rental property

Tracking your expenses helps you understand where your money is going.  It can reveal patterns like how much you are spending on entertainment, takeout, or subscriptions — which might otherwise go unnoticed.

This awareness can support more informed decision-making, such as planning for upcoming bills, adjusting spending where needed, or setting realistic savings targets.  It also makes budgeting easier, whether for personal use or business operations, and can help with managing cash flow and working towards financial goals.

3. Assets – Things of Value You Own

Assets are things you own that have value. These can be used in daily life, saved for future use, or sold if needed. Common examples of assets include:

• A house or apartment
• A caror vehicle
• Business tools or equipment
• Cash or savings in the bank

Some assets, like a home or car, provide long-term use. Others, like an investment property or business equipment, might even help generate income. Even smaller items, such as money in a savings account, are considered assets because they hold value and can be accessed when needed.

In simple terms, assets are things that belong to you and are worth something, now or in the future.

4. Liabilities – Money You Owe

Liabilities are amounts of money you owe to others.  These are debts or financial obligations that need to be paid back over time.

Common examples include:

• A home loan or mortgage
• A car loan
• Credit card balances
• Business loans or finance agreements

A liability could be something you repay in full at once or gradually through regular payments.  These amounts remain part of your financial picture until they’re completely paid off.

Tracking your liabilities helps you see how much debt you currently have.  It also shows how your debts impact your net financial position, especially when compared with the value of your assets.

How These Concepts Work Together

These four concepts — income, expenses, assets, and liabilities come together to form the foundation of two important accounting reports:

Income Statement

• This shows your income and expenses over a period of time. It helps you see whether you have a surplus (money left over) or a shortfall (spending more than you earn).

Balance Sheet

• This shows what you own (assets) and what you owe (liabilities) at a point in time. It also shows the difference between the two, which is your net position or net wealth.

Together, these reports give you a clear picture of your overall financial health — how much is coming in and going out, and where you stand financially.

Examples of Applying These Concepts

‍BusinessFinances – Example Explained

Let’s say you run a small business.  Here’s how your financial activity might look when using the four basic accounting concepts:

Income and Expenses:

• You earned $1,000 in sales from customers.  This is recorded as income.
• You paid $500 in office rent and $200 in staff wages.  These are regular business costs, so they’re recorded as expenses.
• After expenses, you’re left with $300 in net income (or profit).  This shows how much money the business kept after covering its costs.

Assets and Liabilities:

• You purchased a motor vehicle for $40,000 to use in the business.  Because this is something valuable the business owns and will use over time, it’s recorded as an asset.
• You also paid a $2,000 rental bond, which you expect to get back later.  This is also an asset.
• You didn’t pay for the vehicle outright. You borrowed $35,000 through a car loan. This is a liability, as it’s money the business still owes.

Property Investment Finances – Example Explained

Now imagine you own a rental property.  Here’s how your financial activity might be recorded using the four key accounting concepts:

Income and Expenses:

• You received $2,000 in rent from your tenants.  This is recorded as income.
• You paid $250 in council rates, $100 in agent fees, and $50 in utility costs.  These are regular, ongoing costs related to the property, so they are recorded as expenses.
• After these costs, your net income (surplus) from the property is $1,600.

Assets and Liabilities:

• You bought the property for $700,000.  This is a significant asset, as it’s something of value you now own.
• You also spent $10,000 on landscaping, which improves the property and increases its value. This is recorded as an asset too.
• To help pay for the property, you borrowed $550,000 through a home loan.  This is a liability, as it’s money you still owe to the bank.

Personal Finances – Example Explained

Let’s say you’re managing your house hold budget.  Here’s how your finances might be recorded using the four accounting concepts:

Income and Expenses:

• You earned $15,000 this month from your job.  This is your income.
• You spent $1,000 on utility bills, $2,000 on groceries, and $2,000 on entertainment.  These are regular personal expenses.
• After these expenses, your net income (or savings) for the month is $10,000.

Assets and Liabilities:

• You own a house worth $1,000,000.  This is a major asset, as it’s something valuable that you own.
• You also own a car valued at $55,000, which is recorded as another asset.
• You have a home loan of $750,000 and a car loan of $45,000.  These are your liabilities, since theyare debts you still need to repay.

Why Using a Tool Helps You Stay on Top of Your Finances

Understanding your finances is a great first step — but keeping track of everything regularly can be challenging.  With money coming in and going out from different places — like your salary, business income, rental properties, or everyday bills — it’s easy to lose track.

This is where having a simple tool can make a big difference.

Rather than juggling spreadsheets, notebooks, or multiple apps, a good financial tracking tool helps you bring everything together in one place.  It lets you record what you earn, what you spend, what you own, and what you owe — without needing to be an expert in accounting.

That’s exactly what Myaccountant is built for.  It simplifies financial tracking so you can stay organised and get a clearer picture of your overall finances — whether you’re managing a business, property, or your personal budget.

How Myaccountant Helps You Track and Manage Your Finances

Myaccountantis a simple, all-in-one platform that lets you track your business, property, and personal finances — all in one place.

 It’s designed for everyday people, including those who have never used accounting software before.  Whether you’re managing business cash flow, keeping an eye on rental property expenses, or just trying to understand your day-to-day spending, Myaccountant makes it easy to stay organised.

You can record income and expenses, track what you own and what you owe, and see everything come together in one clear dashboard.  It’s a straight forward way to stay on top of your money — without feeling overwhelmed by complex accounting software.

What You Can Do with Myaccountant

Myaccountant is designed to make tracking your finances as simple and stress-free as possible. Here’s what you can do:

• Track Income: Use the Add Income feature to record money coming in — whether it’s your salary, business sales, or rental income.
• Track Expenses: Use the Add Expense feature to log your regular bills, living costs, or business-related spending.
• ‍Track Assets and Liabilities: Use the Add Payment feature to record big purchases like a car, property, or equipment as assets, and things like loans or credit card balances as liabilities.
• ‍Bank Feeds: Connect your bank accounts and credit cards so transactions come in automatically.  This saves time and reduces manual data entry.
• ‍Smart Categorisation: All transactions are sorted into business, property, or personal categories — making it easy to see where your money is going and stay organised.

‍See Everything on the Myaccountant Dashboard

The Myaccountant dashboard gives you a clear, real-time snapshot of your entire financial picture — all in one place.‍

Consolidated Net Surplus:

This shows the total amount left over after your income and expenses are combined across your business, property, and personal finances.  It helps you see how much money you’ve actually saved or retained overall.

Consolidated Net Wealth:

This shows your total assets minus total liabilities across all areas.  In other words, it gives you a full view of your financial position— what you own versus what you owe.

With everything in one place, the dashboard makes it easy to understand your finances at a glance, without switching between systems or doing manual calculations.

How Your Finances Come Together in Myaccountant

When you track your money using Myaccountant, you can see how all parts of your financial life connect. Here’s a simple example:

Your Net Surplus (Money Left Over):

• You made a $300 profit from your business.
• You had a $1,600 surplus from your rental property.
• You saved $10,000 from your personal income this month.
• Total Net Surplus = $11,900

This is the total amount of money you didn’t spend across all areas.

Your Net Wealth (What You Own Minus What You Owe):

• Your business net worth is $7,300.
• Your property net worth is $161,600.
• Your personal net worth (home, car, minus loans) is $270,000.
• Total Net Wealth = $438,900

This gives you a complete picture of your financial position in one place — how much money you’ve saved and what your overall wealth looks like across your business, investments, and personal life.

‍In Summary

Understanding the four basic accounting concepts — income, expenses, assets, and liabilities can make it much easier to keep track of your money.  These concepts aren’t just for accountants or business owners.  They apply to everyday life, whether you're managing a business, looking after an investment property, or simply handling your personal finances.

Many people rely on traditional accounting software to manage their business finances, but these tools can often feel complex, overwhelming, or too business-focused.  They’re not always built for everyday users, and they rarely help with tracking personal spending or property-related finances.

That’s where Myaccountant makes a difference.

It’s designed to be simple, flexible, and user-friendly — no accounting background needed.  Myaccountant lets you track everything in one place, across:

• Business finances
• Property investments
• Personal income and expenses

With Myaccountant, you can:

• Record your income and expenses
• Add payments related to assets or liabilities
• Link your bank accounts for automatic transaction imports
• View everything together on one clear dashboard

It’s a helpful tool to bring structure, clarity, and peaceof mind to your finances — without the confusion of traditional software.

This article is for general information and educational purposes only. It does not constitute financial advice.