The Language of Accounting New!
You don't have to be a CPA to understand this discussion. We'll set to rest any confusion over the differences between debits and credits and how they are used.
Components of the Accounting System New!
Think of the accounting system as a wheel whose hub is the general ledger (G/L). Feeding the hub information are the spokes of the wheel.
Basic Terms and Concepts New!
There are a few (and only a few) things you need to understand in order to make setting up your accounting system easier. They're basic (trust me), and they will probably clear up any confusion you may have had in the past when talking with your CPA or other technical accounting types.
Income Statements
"An income statement, otherwise known as a profit and loss
statement, is a summary of a company's profit or loss during any
one given period of time, such as a month, three months, or one
year."
Balance Sheets
"A balance sheet is a snapshot of a business' financial condition at
a specific moment in time, usually at the close of an accounting
period. A balance sheet comprises assets, liabilities, and owners'
or stockholders' equity."
Depreciation
"The concept of depreciation is really pretty simple. For example,
let's say you purchase a truck for your business. The truck loses
value the minute you drive it out of the dealership. The truck is
considered an operational asset in running your business."
Amortization
"In the course of doing business, you will likely acquire what are known as intangible assets. These assets can contribute to the revenue growth of your business and, as such, they can be expensed against these future revenues. An example of an intangible asset is when you buy a patent for an invention."
Inventory Accounting
"Inventory accounting may sound like a huge undertaking but in reality, it is quite straightforward and easy to understand. You start with the inventory you have on hand. No matter when you sell product, the value of your inventory will remain constant based on accepted and rational methods of inventory accounting."
- Featured Book
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Streetwise Small Business Start-Up
When you start a small business you soon discover that things just don't happen in the real world the way they tell you in business textbooks: Invoices don't get paid by their due dates,
ads don't consistently bring in customers, sales don't continually rise, and profits aren't always there.
In this book, small business maverick Bob Adams shows you how things really get done, and acts as your mentor by providing instant access to streetwise advice on every small business topic.
Regular price: $17.95
