Small Business Accounting

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Issuing Reports When GAAP Aren’t Used

Some auditing clients don’t follow Generally Accepted Accounting Principles (GAAP). Some companies — usually smaller, private ones — may use a cash or tax basis instead. Companies that are highly regulated [more…]

Testing the Reliability of Documents

Part of an auditor’s job for a client can include verifying company documents. Attestation is a subset of assurance services that focuses on whether your engagement’s subject matter complies with the applicable [more…]

Conducting Compliance Audits

The purpose of compliance audits is to see how well a company is following applicable rules, policies, and regulations. For example, as an internal auditor your job may be to see how well various departments [more…]

Auditing Prepaid Expenses and Deferred Charges

As an auditor you have to pay attention to all of a company’s assets. Prepaid expenses and deferred charges appear on a company’s balance sheet as other assets [more…]

Examining Inherent Risks of Fixed Assets

At every step of an audit, you have to consider risks of misstatement and their associated controls. When you are auditing assets, be sure to focus is on identifying risks in the fixed-asset management [more…]

Assessing Fixed-Asset Control Risk

When auditing a company’s assets, don’t forget to take a look at asset control risk features the company has in place. During your audit you can perform tests of internal controls to limit the number of [more…]

Testing Transaction Assertions During an Audit

During your audit, you need to test management financial statement assertions for fixed and intangible asset transactions. The six assertions that you must attend to when auditing — occurrence, ownership [more…]

Responsibilities of an Accounting Department

Most people don’t realize the importance of the accounting department in keeping a business operating without hitches and delays. That’s probably because accountants oversee many of the back-office functions [more…]

Balance Sheet Basics and the Accounting Equation

One type of accounting report is a balance sheet, which is based on the accounting equation: Assets = Liabilities +Owners’ Equity. The balance sheet — also called a [more…]

Considering Careers in Accounting

Careers in accounting are diverse and can be lucrative. In our highly developed economy, many people work in accounting-related fields. In fact, nearly 2 million people make their living as bookkeepers [more…]

Bookkeeping and Its Basic Purpose

Bookkeeping, when done properly, gives you an excellent gauge of how well your business is doing. Bookkeeping also provides financial information throughout the year so you can test the success of your [more…]

Basic Bookkeeping Terms and Phrases

Get a firm understanding of key bookkeeping and accounting terms and phrases before you begin work as a bookkeeper. Bookkeepers use specific terms and phrases everyday as they track and record financial [more…]

Organizing Bookkeeping Records for Your Business

Staying organized is critical to efficient and accurate bookkeeping. Organize your bookkeeping records by deciding what to keep, and how to find information quickly when you need it. Everything you do [more…]

Using Bookkeeping Tools to Manage Daily Finances

After you set up your business’s books and put in place your internal controls, you’re ready to use the bookkeeping systems you established to manage the day-to-day operations of your business. You’ll [more…]

The Difference between Bookkeeping and Accounting

Every business and not-for-profit entity needs a reliable bookkeeping system based on established accounting principles. Keep in mind that accounting is a much broader term than [more…]

The Multiple Meanings of “Free Cash Flow”

You'll encounter the term free cash flow in finance circles — but the term hasn't been officially defined. Furthermore, free cash flow doesn't appear in cash flow statements reported by businesses. Rather [more…]

Choosing an Accounting Method for Your Business

Different businesses make different accounting decisions. Some businesses choose conservative accounting methods while others choose liberal accounting methods. Accounting is more than just reading the [more…]

The Basics of Double-Entry Bookkeeping

All businesses, whether they use the cash-basis accounting method or the accrual accounting method, use double-entry bookkeeping to keep their books. A practice that helps minimize errors and increase [more…]

Key Basic Accounts for Balance Sheets and Income Statements

A bookkeeper tracks all the financial transactions of a business and is responsible for identifying the account in which each transaction should be recorded. Accounting provides the structure you must [more…]

Understanding a Bookkeeper’s Chart of Accounts

The Chart of Accounts is the roadmap that a business creates to organize its financial transactions. Essentially, this chart lists all the accounts a business has, organized in a specific order; each account [more…]

Balance Sheet Accounts: Current Assets, Long-Term Assets

The Chart of Accounts for a business includes balance sheet accounts that track what the company owns — its assets. The two types of asset accounts are [more…]

Liabilities and Owners’ Equity in Balance Sheet Accounts

The Chart of Accounts for a business includes balance sheet accounts that track liabilities and owners’ equity. Liabilities include what your business owes to others, such as vendors and financial institutions [more…]

Tracking Income Statement Accounts for a Chart of Accounts

The income statement portion of a Chart of Accounts includes revenue and expense accounts. The income statement shows how much money a business generated from sales and how much money it spent to generate [more…]

A Bookkeeper's Key Functions for Paying Bills

After recording purchase transactions for a business, the bookkeeper takes primary responsibility for making sure that the bills are paid for both the inventory and the supplies purchased. Usually, you'll [more…]

Accounting Basics: Reporting Cash Flows and Profit and Loss

When examining the financial statements for a business, the statement of cash flows and the income statement (also called the profit and loss statement) differ from the balance sheet in one important respect [more…]

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