Small Business Accounting

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Understanding Accounting Methods

Officially, there are two types of accounting methods,which dictate how the company's transactions are recorded in the company's financial books: cash-basis accounting and accrual accounting. The key difference [more…]

Deciding between Cash-Basis and Accrual Accounting

Before you can start recording business transactions, you must decide whether to use cash-basis or accrual accounting. The crucial difference between these two accounting processes is in how you record [more…]

Reading Consolidated Financial Statements

Most major corporations comprise numerous companies bought along the way to create their empires. The financial statement reflects the financial results for all the entities it bought as well as the original [more…]

Choosing a Budget Method

A budget is nothing more than a written estimate of how an organization — or a particular project, department, or business unit — will perform financially. If you can accurately predict your company's [more…]

Acquiring Kitchen Equipment for Your Restaurant

New York has the Bowery. Chicago has Restaurant Row. Most major cities have this kind of restaurant supply street. Whether the products are new or used, you'll likely buy it here. If you're not located [more…]

Reading an Annual Report

Without a doubt, annual reports are at the pinnacle of corporate communication. The point of the annual report is to provide a summary of exactly how a company has performed in the preceding year, and [more…]

Detecting Creative Revenue Accounting in Financial Reports

Analyzing financial reports is difficult enough, but the tricks used for reporting revenue add another layer of complexity. You can see through many common creative accounting tactics by carefully analyzing [more…]

Converting Your Manual Bookkeeping to a Computerized System

If you're converting a manual bookkeeping system to a computerized system, your conversion will take a bit more time than just starting fresh because you need to be sure your new system starts with information [more…]

Taking a Look at a Sarbanes-Oxley Overview

In response to a loss of confidence among American investors reminiscent of the Great Depression, President George W. Bush signed the Sarbanes-Oxley Act into law on July 30, 2002. SOX, as the law was quickly [more…]

Avoiding Lawsuits and Prosecution under Sarbanes-Oxley

How do you keep yourself, your department, and your company out of the Sarbanes-Oxley (SOX) spotlight? Here are a few tips for keeping the litigators off your doorstep and sleeping soundly with SOX compliance [more…]

The Importance of a Financial Paper Trail

Accounting for a company's finances is all about creating an accurate paper trail. You want to track of all your company's financial transactions so if a question comes up at a later date, you can turn [more…]

Presenting Financial Reports: Turning Numbers into Information

Often, when the financial types get up and present a business's financial status, it seems like the lights got turned out and everyone went home. Even though you listen intently, it seems like they're [more…]

The Scope of Sarbanes-Oxley: Securities and Issuers

To understand which parts of SOX apply to your company, you need to understand what type of investments are considered securities and which types of issuers are subject to or exempt from SOX. [more…]

Basic Bookkeeping for Your Small Business

Bookkeeping refers mainly to the record-keeping aspects of accounting. Bookkeeping is essentially the accounting process (some would say the drudgery) of recording all the information regarding the transactions [more…]

The Importance of Standardizing Business Source Documents

All business transactions require paperwork, called source documents. Business source documents, which are important to bookkeeping, need to be standardized. With standardized source documents, your bookkeeper [more…]

How to Hire the Right Accountant for Your Business

A business's bookkeeper or accountant should have the skills and knowledge that he or she needs to perform the required functions. If you're going to hire an accountant, you need to know what qualifications [more…]

Examining End-of-Period Bookkeeping Procedures

Even if all transactions during the year (or other business period) have been recorded correctly, the business's accounts still aren't quite ready for preparing the financial statements. Additional procedures [more…]

The Importance of a Bookkeeping Audit Trail

Good business bookkeeping systems leave good audit trails. An audit trail is a sequence of events leading up to a bookkeeping entry in your business's accounts. You start with the source documents and [more…]

Watching for Illegal Accounting Practices in Your Business

Fraud, embezzlement, and misappropriation can occur in every size of business. Such illegal accounting practices require manipulation of a business’s accounts. Keep your eyes open for these kinds of illegal [more…]

How to Choose the Right Accounting Software for Your Business

Accounting software packages are available for businesses of every size, from small home-based businesses to multinational corporations. Accounting software is a booming business, which means you have [more…]

How to Read an Income Statement

Some aspects of income statements may seem obvious, but other parts of income statements might leave you stumped. You need to identify the parts of an income statement and to know what they mean before [more…]

Examining Your Asset Accounts

The activities of a business involve inflows and outflows of cash, as you know. What you might not know, however, is that the profit-making process also involves four other basic operating assets, explained [more…]

Examining Your Business's Liability Accounts

The activities of a business involve inflows and outflows of cash, as you know. What you might not know, however, is that accountants use three different types of liability accounts to record a business's [more…]

Reasons to Report Extraordinary Gains and Losses on Your Income Statement

Many businesses report unusual, extraordinary gains and losses on their income statements. If your business has extraordinary gains and losses to report, your business's income statement is divided into [more…]

What You Put in a Business Balance Sheet

A balance sheet is the financial condition of your business at an instant in time. In your business balance sheet, you must put financial information that's in constant motion because the activities of [more…]

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