Small Business Accounting

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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…]

Following Outgoing Cash with the Cash Disbursements Journal

The Cash Disbursements journal is the first place you record cash that goes out of the business and used to pay bills, salaries, rents, and other necessities. The Cash Disbursements journal is the point [more…]

Using a Sales Journal to Record Non-Cash Transactions

The Sales journal is where you initially record transactions for sales made by store credit (non-cash transactions). Each entry in the Sales journal must indicate the customer’s name, the invoice number [more…]

How Bookkeepers Track Purchases with the Purchases Journal

Purchases of products to be sold to customers at a later date are a key type of non-cash transaction, recorded in a business bookkeeper’s Purchases journal. All businesses must have something to sell, [more…]

Preparing a General Journal for Miscellaneous Transactions

Bookkeepers can prepare a general journal for miscellaneous transactions that don’t fit in one of the four main journals for a business (Cash Receipts, Cash Disbursements, Sales, and Purchases). If you [more…]

Bookkeeping: Posting Journal Information to the Appropriate Accounts

When bookkeepers close their books at the end of the month, they summarize all the journals — that is, they total the columns and post the information to update all the accounts involved. [more…]

Simplifying Journaling with Computerized Accounting

If you’re working with a computerized accounting software package, you enter a transaction only once, which greatly simplifies your bookkeeping journaling. All the detail that normally needs to be entered [more…]

Padding Profits by Manufacturing Too Many Products

Whenever production output for a business is higher than sales volume, be on guard. Excessive production can inflate the profit figure. Until a product is sold, the product cost goes in the inventory asset [more…]

Protecting Checking, Savings, and Petty Cash Business Accounts

Protect your business's checking, savings, and petty cash accounts. Cash used in a business is vulnerable; "dipping" into the checking, savings, and petty cash accounts can be tempting for some employees [more…]

How to Record Expenses and Losses for a Business

To make a profit, business managers have to control expenses. This task requires a good deal of information about how to record expenses and losses. How many expense accounts should a business maintain [more…]

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