Preparing the Books for a Small Business

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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…]

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…]

Adjustments to Net Income for Determining Cash Flow from Operating Activities

Debtors, stock and prepaid expenses are operating assetsused in the profit making process. Creditors and accrued expenses payable are operating liabilities [more…]

Making Accounting Adjustments to Reach Profit Potential

Having your business reach a profit is important; if it doesn’t, sooner or later the business will fail. As a business manager, you want to keep a close eye on the financial statements and make the necessary [more…]

How Liquidity Ratios Figure into Company Reports

If a company doesn’t have cash on hand to cover its day-to-day operations, it’s probably on shaky ground. Use the following formulas to find out whether a company has plenty of liquid [more…]

Bookkeeping Ways to Value Your Stock

Bookkeepers use various methods for valuing stock. Your company must choose one method and follow that method all the time, in order to keep the tax man happy. Four ways in which you can do this are: [more…]

Key Steps in Keeping the Books

Any workflow or work process has its key stages or steps – a part of the process where you must remember to perform a certain action. In bookkeeping, the key steps are as follows: [more…]

Building Blocks of a Bookkeeping System

At the root of any system you’ll find the essential elements that form the basis of that system. In the world of bookkeeping, the three most fundamental building blocks to any bookkeeping system are: [more…]

Flow of Credits and Debits in Double-Entry Bookkeeping

In double-entry bookkeeping, you enter all transactions in the books twice: once as a debit and once as a credit. This chart shows you how debits and credits affect your various business accounts: [more…]

Tracking Cash: Bookkeeping Musts after You Get the Money

Receiving incoming money is all well and good, but as a bookkeeper you need to remember to take certain steps after it arrives. You need to: [more…]

Defining Asset Depreciation for Businesses

Accountants use depreciation as a way to allocate the costs of a fixed asset over the period in which the asset is useable to the business. The bookkeeper records the full transaction when the asset is [more…]

Calculating the Useful Life of a Fixed Asset

Any asset that has a lifespan of more than a year is called a fixed asset. All businesses use equipment, furnishings, and vehicles that last more than a year. Although they may last longer than other assets [more…]

Exploring the Methods of Depreciating Assets

When calculating depreciation of your business assets each year, you have a choice of four methods: Straight-Line, Sum-of-Years-Digits, Double-Declining Balance, and Units of Production. After you decide [more…]

How to Use QuickBooks to Calculate Depreciation

When using QuickBooks for your accounting system, you don’t have to manually calculate depreciation expense amounts for your business. The Planning & Budgeting section of QuickBooks includes Decision Tools [more…]

Recording Long-Term Debt Transactions for Your Business

Most businesses borrow money for both long-term periods(periods of more than one year) and short-term periods(periods of one year or less). Long-term debt can include a 5-year car loan, 20-year mortgage [more…]

Closing Out the Cash Journals in Your Business

After business owners check the accuracy of their accounting books, they can finalize the cash journals and prepare financial reports to verify the company’s financial success or failure during the last [more…]

Credit Card Fees Your Business May Be Charged

When your business allows customers to use credit cards, you pay fees to the bank that processes these transactions, which is probably the same bank that handles all your business accounts. These fees [more…]

Reconciling Credit Card Statements for Your Business

If your business accepts credit cards as a payment option, you’ll need to reconcile credit card statements against the company’s books. Each month, the bank that handles the credit-card sales for your [more…]

Setting Up Depreciation Schedules for Your Business

In order to keep good accounting records, you must track how much you depreciate each of your business assets in some form of a schedule. After all, your financial statements only include a total value [more…]

The Positive Impact of Depreciation on Cash Flow

Depreciation has a positive impact on cash flow for a business. Fixed assets wear out and lose their economic usefulness over time. Some fixed assets last many years, such as office furniture and buildings [more…]

Types of Interest Available for Business Loans

Few businesses are able to make major purchases without taking out loans. Businesses must pay interest, a percentage of the amount loaned, to whoever loans them the money, whether loans are for vehicles [more…]

Nominal and Effective Interest Rates for Business Loans

Two interest rates used in business loans are the nominalinterest rate and the effective interest rate. The annual interest rate quoted by the bank is often called the nominal rate [more…]

Handling Interest Income for Your Business

The income that your business earns from its savings accounts, certificates of deposits, or other investment vehicles is called interest income. A bookkeeper is rarely required to calculate interest income [more…]

Checking Out Computerized Journal Records for Your Business

Although you don’t have to close out journal pages if you keep your books using a computerized accounting system, running a spot check (at the very least) of what you have in your paper records versus [more…]

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