Small Business Accounting

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Accounting and Reporting by Government and Not-For-Profit Entities

Accounting and financial reporting standards have evolved and been established for U.S. government and not-for-profit entities. Financial reporting by government and not-for-profit entities is a broad [more…]

Classifications of Business Transactions

In understanding accounting, you need to be very clear about which classification of business transaction you’re looking at. Businesses are profit-motivated, so one basic type of transaction is obvious [more…]

The Three Types of Sales Transactions

The effect that making a sale has on a business’s financial condition depends on the type of sales transaction that's made — that is, when the cash is collected from the sale When a business sells a product [more…]

Keeping the Accounting Equation in Balance

The accounting equation used in business must always be kept in balance — the assets on one side of the equation must equal the claims against the assets on the other side: [more…]

How to Adjust for General Ledger Errors

The bookkeeping entries that you make in a General Ledger aren’t cast in stone. If necessary, you can always change or correct any errors with what’s called an adjusting entry. [more…]

Recording Investing and Financing Transactions for a Business

Though few in number, investing and financing transactions for a business are important and usually involve big chunks of money. The investing and financing transactions are reported in the statement of [more…]

How to Choose the Right Bank for Your Business

Finding the right bank for your business, to help you set up your checking account and the controls that limit access to that account, is crucial. When evaluating your banking options, ask yourself the [more…]

Controlling Cash Register Transactions in Your Business

It’s important for businesses to carefully monitor the money in their cash registers and to maintain proper control of all cash register transactions. Have you ever gone into a business and tried to pay [more…]

Maintaining Proper Paperwork for a Business’s Cash Transactions

When it comes to handling cash transactions in your business, a lot of paperwork changes hands. In order to properly control the movement of cash into and out of your business, careful documentation is [more…]

Basic Types of Financial Fraud in Businesses

Too often, a business owner finds out too late that even the most loyal employee may commit financial fraud and steal from the company if the opportunity arises and the temptation becomes too great — or [more…]

How to Prevent Internal Fraud: Dividing Staff Responsibilities

Your primary protection against internal fraud in your business is properly dividing staff responsibilities when the flow of business cash is involved. Many business people start their operations by carefully [more…]

Balancing Control Costs of Protecting Business Cash and Assets

As a small business owner, you’ll always be trying to balance the cost of protecting your cash and assets with the cost of adequately separating those duties. It can be a big mistake to put in too many [more…]

Insuring Business Cash Accounts through Employee Bonding

If you have employees who handle cash, insuring your business against theft through employee bonding is an absolute must. This insurance, called fidelity bonds [more…]

How to Record a Business’s Unpaid Expenses

Neglecting to record your unpaid expenses can lead to accounting confusion. A typical business pays many expenses after the period in which the expenses are recorded — these are called [more…]

Set-Up and Follow-Up Transactions for Revenue and Expenses

Set-up and follow-up transactions are supporting transactions for the profit-making activities of a business that take place before or after revenue and expenses are recorded. These set-up and follow-up [more…]

Bookkeeping Accounts Used to Track Business Inventory

Products to be sold are called inventory. As a bookkeeper, you use two accounts — Purchases and Inventory — to track inventory for your business. Here's a closer look at what the Purchases and Inventory [more…]

How to Manage Business Inventory and Its Value

After you record the receipt of inventory for your business, you must manage the inventory you have on hand. You also must know the value of that inventory. You may think that as long as you know what [more…]

Comparing Inventory Valuation Methods for a Business

The inventory valuation method you choose for your business — such as FIFO, LIFO, or Averaging — has an impact on your business’s profit margin. You can compare these methods to see what effect each method [more…]

Business Accounting: Buying and Monitoring Inventory Supplies

In addition to inventory, all businesses must buy supplies that are used to operate the business, such as paper, pens, and paper clips. Supplies that aren’t bought in direct relationship to the manufacturing [more…]

Getting Started with Accounting Software

After you choose the accounting software you want to use in your business, the hard work is done because actually setting up the accounting software will probably take you less time than researching your [more…]

Accounting: Examining Both Sides of Business Transactions

The accountant’s job is to capture all the transactions of the business, determine the financial effects of every transaction, record every transaction in the business’s accounts, and from the accounts [more…]

How to Develop Entries for the General Ledger

Because your business’s bookkeeping transactions are first entered into journals, you develop many of the entries for the General Ledger based on information pulled from the appropriate journal. [more…]

How to Post Entries to the General Ledger

After you summarize the journals for your business and develop the entries you need for the General Ledger, you post your entries into the General Ledger accounts. When posting to the General Ledger, include [more…]

Using the General Ledger in Computerized Accounting Software

If you keep your books by using a computerized accounting system, posting to the General Ledger is actually done behind the scenes by your accounting software. You can view your transactions right on the [more…]

Tracking Incoming Cash with the Cash Receipts Journal

The Cash Receipts journal is the first place you record incoming cash for your business. The majority of cash received each day comes from daily sales; other possible sources of cash include deposits of [more…]

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