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With help from Dummies, you can be fluent in no time.","relatedArticles":{"self":"https://dummies-api.dummies.com/v2/articles?category=34226&offset=0&size=5"}},"_links":{"self":"https://dummies-api.dummies.com/v2/categories/34226"}},"relatedCategoriesLoadedStatus":"success"},"listState":{"list":{"count":10,"total":1139,"items":[{"headers":{"creationTime":"2016-03-27T16:47:48+00:00","modifiedTime":"2022-04-07T20:25:15+00:00","timestamp":"2022-06-22T19:37:34+00:00"},"data":{"breadcrumbs":[{"name":"Business, Careers, & Money","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34224"},"slug":"business-careers-money","categoryId":34224},{"name":"Business","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34225"},"slug":"business","categoryId":34225},{"name":"Accounting","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34226"},"slug":"accounting","categoryId":34226},{"name":"Bookkeeping","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34228"},"slug":"bookkeeping","categoryId":34228}],"title":"Bookkeeping For Dummies Cheat Sheet (Australia/New Zealand Edition)","strippedTitle":"bookkeeping for dummies cheat sheet (australia/new zealand edition)","slug":"bookkeeping-for-dummies-cheat-sheet-australianew-zealand-edition","canonicalUrl":"","seo":{"metaDescription":"This Cheat Sheet is a quick reference to the things you should know if you want to be an excellent bookkeeper.","noIndex":0,"noFollow":0},"content":"A great bookkeeper cares that the financial statements make sense and gets upset when something doesn’t balance or stuff goes missing. They also feel responsible when it comes to getting customers to pay on time. A good bookkeeper, in other words, is worth their weight in gold.\r\n\r\nThis Cheat Sheet summarizes what you need to know to be an excellent bookkeeper.","description":"A great bookkeeper cares that the financial statements make sense and gets upset when something doesn’t balance or stuff goes missing. They also feel responsible when it comes to getting customers to pay on time. A good bookkeeper, in other words, is worth their weight in gold.\r\n\r\nThis Cheat Sheet summarizes what you need to know to be an excellent bookkeeper.","blurb":"","authors":[{"authorId":9372,"name":"Veechi Curtis","slug":"veechi-curtis","description":" <p><b>Veechi Curtis</b> dis a qualified accountant and consultant who specialises in teaching small businesses about technology and finance. She is the author of <i>Creating a Business Plan For Dummies,</i> Second Edition, <i>Small Business For Dummies,</i> Fourth Edition, and <i>Bookkeeping For Dummies,</i> Australian Edition. 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Australia","slug":"register-as-a-bas-agent-in-australia","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/148399"}}],"content":[{"title":"Bookkeeping checklist","thumb":null,"image":null,"content":"<p>This step-by-step bookkeeping checklist should help you sleep easy at night knowing that you have done what you needed to do to get your books in tip-top shape.</p>\n<ol class=\"level-one\">\n<li>\n<p class=\"first-para\">Ensure you set up bank feeds for every account.</p>\n</li>\n<li>\n<p class=\"first-para\">At least once a month, reconcile every bank account against bank statements.</p>\n</li>\n<li>\n<p class=\"first-para\">Look for pre-dated or future-dated transactions.</p>\n</li>\n<li>\n<p class=\"first-para\">Eat a family bar of chocolate in one sitting (oh yes, and clean up the debtors list).</p>\n</li>\n<li>\n<p class=\"first-para\">Sweep through the creditors list.</p>\n</li>\n<li>\n<p class=\"first-para\">Check tax codes on all transactions.</p>\n</li>\n<li>\n<p class=\"first-para\">Reconcile your GST liability accounts.</p>\n</li>\n<li>\n<p class=\"first-para\">Give inventory the once over.</p>\n</li>\n<li>\n<p class=\"first-para\">Reconcile all payroll liability accounts.</p>\n</li>\n<li>\n<p class=\"first-para\">Scan transaction reports for weird stuff or mistakes.</p>\n</li>\n<li>\n<p class=\"first-para\">Read through the financials and check they make sense.</p>\n</li>\n</ol>\n"},{"title":"Understanding account types","thumb":null,"image":null,"content":"<p>Understanding the difference between account types is the secret to coding transactions correctly. Here’s the cheat’s guide to understanding the difference between assets and liabilities, equity and income, bananas and apples.</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\"><b>Current asset</b>: Anything that a business owns that can realistically be converted into cash within the next 12 months.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Non-current asset:</b>A physical asset such as office equipment, land, buildings, computers or motor vehicles, that isn’t expected to be converted into cash within the next 12 months.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Current liability:</b>An amount owed by the business that is due within the next 12 months, including scary stuff such as credit cards.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Non-current liability:</b> Anything you owe that isn’t due to be paid out within the next 12 months, such as hire purchase debts or bank loans.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Equity:</b>The ‘interest’ that shareholders or an owner has in the business, including both capital contributed and the profit or loss built up over time.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Income:</b>Money generated from sales to customers or returns on investments.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Cost of sales:</b>What it costs in raw materials, supplies or production labour to make the goods that you sell (also called <i>cost of goods sold</i> or <i>variable expenses</i>).</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Expenses:</b>The day-to-day running costs of your business, including things like advertising, bank charges, computer consumables, diamond rings, electricity, motor vehicle expenses, rent, telephone expenses and wages. (Just kidding about the diamonds.) Expenses are sometimes also called <i>fixed expenses</i> or <i>overheads</i>.</p>\n</li>\n</ul>\n"},{"title":"Stay up to date to meet tax deadlines","thumb":null,"image":null,"content":"<p>Forget birthdays, anniversaries and Christmas and instead, punctuate your diary with a list of tax deadlines. Here’s a summary of the deadlines that every Australian bookkeeper needs to know about in order to stay out of trouble.</p>\n<table>\n<caption>Australian Bookkeeping Deadlines</caption>\n<tbody>\n<tr>\n<td>Business Activity Statements</td>\n<td>Monthly payments: 21 days after the end of each month.<br />\nQuarterly payments: 28 days after the end of each quarter, except<br />\nfor the December quarter, where the deadline is February 28</td>\n</tr>\n<tr>\n<td>Payment ummaries</td>\n<td>July 14</td>\n</tr>\n<tr>\n<td>Annual withholding declaration</td>\n<td>August 14</td>\n</tr>\n<tr>\n<td>Superannuation</td>\n<td>28 days after the end of each month or quarter, depending on<br />\nthe fund</td>\n</tr>\n<tr>\n<td>PAYG withholding tax</td>\n<td>21 days after the end of the month for monthly payments, or 28<br />\ndays after the end of the quarter for quarterly payments</td>\n</tr>\n<tr>\n<td>Valentine’s Day</td>\n<td>February 14. Remember chocolates, red wine and roses or<br />\nterrible consequences may ensue</td>\n</tr>\n</tbody>\n</table>\n<table>\n<caption>New Zealand Bookkeeping Deadlines</caption>\n<tbody>\n<tr>\n<td>GST return</td>\n<td>28 days after the end of each reporting period, with the<br />\nexception of the November period, when the deadline is 15 January,<br />\nand the March period, when the deadline is 7 May</td>\n</tr>\n<tr>\n<td>PAYE tax and KiwiSaver</td>\n<td>20 days after the end of each month</td>\n</tr>\n</tbody>\n</table>\n"},{"title":"Know your debits from your credits","thumb":null,"image":null,"content":"<p>Understanding debits and credits is a tricky business. (How did accountants get to be so warped, you may wonder?) Don’t sweat, with this table you can get your debits and credits spot on, every time.</p>\n<table>\n<tbody>\n<tr>\n<th>Account Type</th>\n<th>To increase this account</th>\n<th>To decrease this account</th>\n</tr>\n<tr>\n<td>Asset</td>\n<td>Debit</td>\n<td>Credit</td>\n</tr>\n<tr>\n<td>Liability</td>\n<td>Credit</td>\n<td>Debit</td>\n</tr>\n<tr>\n<td>Equity</td>\n<td>Credit</td>\n<td>Debit</td>\n</tr>\n<tr>\n<td>Income</td>\n<td>Debit</td>\n<td>Credit</td>\n</tr>\n<tr>\n<td>Expenses</td>\n<td>Debit</td>\n<td>Credit</td>\n</tr>\n</tbody>\n</table>\n"},{"title":"What's included in a financial statement","thumb":null,"image":null,"content":"<p>With a bit of practice, understanding financial statements is easy. Think of your Balance Sheet reports as a set of before-and-after photos, with your Profit &amp; Loss report telling the story of what happened in between.</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\"><b>Balance Sheet report:</b> Provides a snapshot of the value of assets, liabilities and equity at any point in time</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Profit &amp; Loss report:</b> Summarises income, expense and net profit over a specified period of time</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Statement of Cash Flow</b>: Examines the cash flows in and out of a business</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Trial Balance report:</b> Lists the debit and credit balances of all general ledger accounts at any point in time</p>\n</li>\n</ul>\n"},{"title":"Prevent employee fraud with smart business practices","thumb":null,"image":null,"content":"<p>How do you prevent employee fraud in the workplace, and how can you be sure that nobody has their hand in the till? Like double cream and crash diets, keep bookkeeping tasks and the handling of cash or business assets completely separate. This includes</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\">Authorising online transactions via internet banking</p>\n</li>\n<li>\n<p class=\"first-para\">Working on a cash register and taking cash</p>\n</li>\n<li>\n<p class=\"first-para\">Receiving payments from customers</p>\n</li>\n<li>\n<p class=\"first-para\">Balancing cash registers at the end of the day</p>\n</li>\n<li>\n<p class=\"first-para\">Accessing assets, such as business inventory</p>\n</li>\n</ul>\n"},{"title":"Calculate GST in the blink of an eye","thumb":null,"image":null,"content":"<p>Even with a calculator close to hand, a few shortcuts to help you calculate Goods and Services Tax (GST) are real handy. The whole business of dividing by 11 or multiplying by 0.15 can get very ugly indeed.</p>\n<table>\n<tbody>\n<tr>\n<td></td>\n<th>Australia</th>\n<th>New Zealand</th>\n</tr>\n<tr>\n<td>To calculate how much GST to add</td>\n<td>Multiply by 0.1</td>\n<td>Multiply by 0.15</td>\n</tr>\n<tr>\n<td>To add GST to arrive at a total price</td>\n<td>Multiply by 1.1</td>\n<td>Multiply by 1.15</td>\n</tr>\n<tr>\n<td>To calculate how much GST is included in a price</td>\n<td>Divide by 11</td>\n<td>Multiply by 3 and then divide by 23</td>\n</tr>\n<tr>\n<td>To calculate how much the price was before GST</td>\n<td>Divide by 1.1</td>\n<td>Divide by 1.15</td>\n</tr>\n</tbody>\n</table>\n"},{"title":"Register as a BAS agent in Australia","thumb":null,"image":null,"content":"<p>In Australia, if you’re a contract bookkeeper providing BAS services, then you must register as a BAS agent. The penalty for providing BAS services without registering ranges from a not insignificant $43,000 for an individual to a whopping $212,500 for a body corporate.</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\">A BAS service includes any bookkeeping activity related to GST or PAYG, including configuring tax codes in accounting software, coding tax invoices, generating employee payment summaries or preparing Business Activity Statements</p>\n</li>\n<li>\n<p class=\"first-para\">You don’t have to register as a BAS Agent if you’re an employee receiving wages or you only do basic bookkeeping data entry based on explicit instructions provided by the client or by their tax agent.</p>\n</li>\n<li>\n<p class=\"first-para\">For details about registering as a BAS Agent page, visit the <a href=\"http://www.tpb.gov.au/\">Tax Practitioners Board website.</a></p>\n</li>\n</ul>\n"}],"videoInfo":{"videoId":null,"name":null,"accountId":null,"playerId":null,"thumbnailUrl":null,"description":null,"uploadDate":null}},"sponsorship":{"sponsorshipPage":false,"backgroundImage":{"src":null,"width":0,"height":0},"brandingLine":"","brandingLink":"","brandingLogo":{"src":null,"width":0,"height":0}},"primaryLearningPath":"Advance","lifeExpectancy":"Two years","lifeExpectancySetFrom":"2022-04-07T00:00:00+00:00","dummiesForKids":"no","sponsoredContent":"no","adInfo":"","adPairKey":[]},"status":"publish","visibility":"public","articleId":207627},{"headers":{"creationTime":"2016-03-27T16:47:48+00:00","modifiedTime":"2022-03-25T20:03:40+00:00","timestamp":"2022-06-22T19:37:31+00:00"},"data":{"breadcrumbs":[{"name":"Business, Careers, & Money","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34224"},"slug":"business-careers-money","categoryId":34224},{"name":"Business","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34225"},"slug":"business","categoryId":34225},{"name":"Accounting","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34226"},"slug":"accounting","categoryId":34226},{"name":"General Accounting","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34230"},"slug":"general-accounting","categoryId":34230}],"title":"Accounting For Canadians For Dummies Cheat Sheet","strippedTitle":"accounting for canadians for dummies cheat sheet","slug":"accounting-for-canadians-for-dummies-cheat-sheet","canonicalUrl":"","seo":{"metaDescription":"Read an easy introduction into the key functions and responsibilities of the accounting department in any organization.","noIndex":0,"noFollow":0},"content":"Every business and not-for-profit entity needs a reliable accounting system to facilitate day-to-day operations and to prepare financial statements, tax returns, and internal reports to managers. The <a href=\"https://www.wiley.com/en-ca/Accounting+For+Canadians+For+Dummies%2C+3rd+Edition-p-9781119575863\" target=\"_blank\" rel=\"noopener\"><em>Accounting For Canadians For Dummies</em></a> Cheat Sheet provides a quick and easy introduction into the key functions and responsibilities of the accounting department in any organization.","description":"Every business and not-for-profit entity needs a reliable accounting system to facilitate day-to-day operations and to prepare financial statements, tax returns, and internal reports to managers. The <a href=\"https://www.wiley.com/en-ca/Accounting+For+Canadians+For+Dummies%2C+3rd+Edition-p-9781119575863\" target=\"_blank\" rel=\"noopener\"><em>Accounting For Canadians For Dummies</em></a> Cheat Sheet provides a quick and easy introduction into the key functions and responsibilities of the accounting department in any organization.","blurb":"","authors":[],"primaryCategoryTaxonomy":{"categoryId":34230,"title":"General Accounting","slug":"general-accounting","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34230"}},"secondaryCategoryTaxonomy":{"categoryId":0,"title":null,"slug":null,"_links":null},"tertiaryCategoryTaxonomy":{"categoryId":0,"title":null,"slug":null,"_links":null},"trendingArticles":null,"inThisArticle":[],"relatedArticles":{"fromBook":[],"fromCategory":[{"articleId":277438,"title":"Financial Accounting: The Effect of Business Transactions","slug":"financial-accounting-the-effect-of-business-transactions","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/277438"}},{"articleId":277429,"title":"What Are Accounting Journals?","slug":"what-are-accounting-journals","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/277429"}},{"articleId":277423,"title":"How to Read Corporate Annual Reports","slug":"how-to-read-corporate-annual-reports","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/277423"}},{"articleId":277418,"title":"Showing the Money: The Statement of Cash Flows","slug":"showing-the-money-the-statement-of-cash-flows","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/277418"}},{"articleId":277410,"title":"10 Accounting Career Opportunities","slug":"10-accounting-career-opportunities","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/277410"}}]},"hasRelatedBookFromSearch":false,"relatedBook":{"bookId":281921,"slug":"accounting-for-canadians-for-dummies-3rd-edition","isbn":"9781119575832","categoryList":["business-careers-money","business","accounting","general-accounting"],"amazon":{"default":"https://www.amazon.com/gp/product/1119575834/ref=as_li_tl?ie=UTF8&tag=wiley01-20","ca":"https://www.amazon.ca/gp/product/1119575834/ref=as_li_tl?ie=UTF8&tag=wiley01-20","indigo_ca":"http://www.tkqlhce.com/click-9208661-13710633?url=https://www.chapters.indigo.ca/en-ca/books/product/1119575834-item.html&cjsku=978111945484","gb":"https://www.amazon.co.uk/gp/product/1119575834/ref=as_li_tl?ie=UTF8&tag=wiley01-20","de":"https://www.amazon.de/gp/product/1119575834/ref=as_li_tl?ie=UTF8&tag=wiley01-20"},"image":{"src":"https://www.dummies.com/wp-content/uploads/accounting-for-canadians-for-dummies-3rd-edition-cover-9781119575832-203x255.jpg","width":203,"height":255},"title":"Accounting For Canadians For Dummies","testBankPinActivationLink":"","bookOutOfPrint":true,"authorsInfo":"<p><b><b data-author-id=\"34814\">John A. Tracy</b>, CPA,</b> is professor of accounting, emeritus, at the University of Colorado in Boulder. Earlier in his career, he was a staff accountant with Ernst &amp; Young.</p> <p><b>C&eacute;cile Laurin, CPA, CA,</b> is a professor of accounting at Algonquin College of Applied Arts and Technology in Ottawa. She has been chief financial officer for three engineering firms and a law firm.</p> <p><b>Lita Epstein, MBA</b> designs and teaches online courses on investing for retirement, getting ready for tax time, and finance and investing for women.</p> <p><b>C&eacute;cile Laurin, CPA, CA</b> is a Chartered Professional Accountant and teacher based in Ottawa.</p>","authors":[{"authorId":34814,"name":"John A. Tracy","slug":"john-a.-tracy","description":" <p><b>John A. Tracy, CPA,</b> is professor of accounting, emeritus, at the University of Colorado in Boulder. Earlier in his career, he was a staff accountant with Ernst &amp; Young.</p> <p><b>C&eacute;cile Laurin, CPA, CA,</b> is a professor of accounting at Algonquin College of Applied Arts and Technology in Ottawa. She has been chief financial officer for three engineering firms and a law firm.</p>","_links":{"self":"https://dummies-api.dummies.com/v2/authors/34814"}},{"authorId":34419,"name":"Cecile Laurin","slug":"cecile-laurin","description":" <p><b>Lita Epstein, MBA</b> designs and teaches online courses on investing for retirement, getting ready for tax time, and finance and investing for women.</p> <p><b>C&eacute;cile Laurin, CPA, CA</b> is a Chartered Professional Accountant and teacher based in Ottawa.</p>","_links":{"self":"https://dummies-api.dummies.com/v2/authors/34419"}}],"_links":{"self":"https://dummies-api.dummies.com/v2/books/"}},"collections":[],"articleAds":{"footerAd":"<div class=\"du-ad-region row\" id=\"article_page_adhesion_ad\"><div class=\"du-ad-unit col-md-12\" data-slot-id=\"article_page_adhesion_ad\" data-refreshed=\"false\" \r\n data-target = \"[{&quot;key&quot;:&quot;cat&quot;,&quot;values&quot;:[&quot;business-careers-money&quot;,&quot;business&quot;,&quot;accounting&quot;,&quot;general-accounting&quot;]},{&quot;key&quot;:&quot;isbn&quot;,&quot;values&quot;:[&quot;9781119575832&quot;]}]\" id=\"du-slot-62b36f7be6e9f\"></div></div>","rightAd":"<div class=\"du-ad-region row\" id=\"article_page_right_ad\"><div class=\"du-ad-unit col-md-12\" data-slot-id=\"article_page_right_ad\" data-refreshed=\"false\" \r\n data-target = \"[{&quot;key&quot;:&quot;cat&quot;,&quot;values&quot;:[&quot;business-careers-money&quot;,&quot;business&quot;,&quot;accounting&quot;,&quot;general-accounting&quot;]},{&quot;key&quot;:&quot;isbn&quot;,&quot;values&quot;:[&quot;9781119575832&quot;]}]\" id=\"du-slot-62b36f7be75ca\"></div></div>"},"articleType":{"articleType":"Cheat Sheet","articleList":[{"articleId":183461,"title":"What Does an Accountant Do?","slug":"what-does-an-accountant-do","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/183461"}},{"articleId":183460,"title":"<b>Transactions and Balance Sheets in Accounting</b>","slug":"transactions-and-balance-sheets-in-accounting","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/183460"}},{"articleId":148396,"title":"<b>The Basic Steps of Bookkeeping</b>","slug":"the-basic-steps-of-bookkeeping","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/148396"}}],"content":[{"title":"What does an accountant do?","thumb":null,"image":null,"content":"<p>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 in a business — as opposed to sales, for example, which is front-line activity, out in the open and in the line of fire. Go into any retail store, and you’re in the thick of sales activities. But have you ever seen a company’s accounting department in action?</p>\n<p>The following list gives you a pretty clear idea of the back-office functions that accountants perform:</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\"><b>Payroll:</b> The total wages and salaries earned by every employee every pay period, which are called gross wages or gross earnings, have to be calculated. Based on detailed private information in personnel files and earnings-to-date information, the correct amounts for income taxes and several other deductions from gross wages have to be determined.</p>\n<p class=\"child-para\">Stubs, which report various information are produced each pay period and given to the employee. The total amounts of withheld income taxes, Canada or Quebec Pension Plans, and Employment Insurance premiums imposed on the employee and employer have to be paid to the federal or provincial government on time. Retirement, vacation, sick pay, and other benefits that employees earn have to be updated every pay period.</p>\n<p class=\"child-para\">Payroll is a complex and critical function that the accounting department performs. Many businesses outsource payroll functions to companies or banks that specialize in this area.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Cash collections:</b> All cash received from sales and from all other sources has to be carefully identified and recorded, not only in the cash account but also in the appropriate account for the source of the cash received. The accounting department makes sure that the cash is deposited in the appropriate business chequing accounts and that the business keeps an adequate amount of coin and currency on hand for making change for customers.</p>\n<p class=\"child-para\">Accountants balance the business’s chequebook and control access to incoming cash receipts. In larger organizations, the treasurer may be responsible for some of these cash flow and cash-handling functions.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Cash payments (disbursements):</b> A business writes many cheques during the course of a year. The accounting department prepares all these cheques for the signatures of the business officers who are authorized to sign cheques. The accounting department keeps all the supporting business documents and files to know when the cheques should be paid, makes sure that the amount to be paid is correct, and forwards the cheques for signature.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Procurement and inventory:</b> Accountants usually are responsible for keeping track of all purchase orders that have been placed for inventory (products to be sold by the business) and all other assets and services that the business buys. A typical business makes many purchases during the course of a year, many of them on credit. This area of responsibility includes keeping files on all liabilities that arise from purchases on credit so that cash payments are processed on time.</p>\n<p class=\"child-para\">The accounting department also keeps detailed records on all products that the business holds for sale and, when the products are sold, records the cost of the goods sold.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Property accounting:</b> A typical business owns many different substantial long-term assets called property, plant, and equipment — including office furniture and equipment, retail display cabinets, computers, machinery and tools, vehicles (autos and trucks), buildings, and land.</p>\n<p class=\"child-para\">Except for relatively small-cost items, a business maintains detailed records of its property, both for controlling the use of the assets and for determining the appropriate amount of depreciation for accounting and tax calculations. The accounting department keeps these property records.</p>\n</li>\n</ul>\n"},{"title":"Transactions and balance sheets in accounting","thumb":null,"image":null,"content":"<p>A balance sheet is a snapshot of the financial condition of a business at an instant in time — the most important moment in time being at the end of the last day of the income statement period. The balance sheet is unlike the income and cash flow statements, which report flows over a period of time. The balance sheet presents the balances (amounts) of a company’s assets, liabilities, and owners’ equity at an instant in time.</p>\n<p class=\"TechnicalStuff\">Notice the two quite different meanings of the term balance. As used in balance sheet, the term refers to the equality of the two opposing sides of a business — total assets on the one side and total liabilities and owners’ equity on the other side, like a scale with equal weights on both sides. In contrast, the balance of an account (asset, liability, owners’ equity, revenue, and expense) refers to the amount in the account after recording increases and decreases in the account — the net amount after all additions and subtractions have been entered.</p>\n<p>The activities, or transactions, of a business fall into three basic types:</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\"><b>Operating activities:</b> This category refers to making sales and incurring expenses, and also includes the allied transactions that are part and parcel of making sales and incurring expenses. For example, a business records sales revenue when sales are made on credit, and then, later, records cash collections from customers. Keep in mind that the term operating activities includes the allied transactions that precede or are subsequent to the recording of sales and expense transactions.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Investing activities:</b> This term refers to making investments in long-term assets and (eventually) disposing of the assets when the business no longer needs them. The primary examples of investing activities for businesses that sell products and services are capital expenditures, which are the amounts spent to modernize, expand, and replace the long-term operating assets of a business.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Financing activities:</b> These activities include securing money from debt and equity sources of capital, returning capital to these sources, and making distributions from profit to owners. Note that distributing profit to owners is treated as a financing transaction, not as a separate category.</p>\n</li>\n</ul>\n<p>An accountant can prepare a balance sheet at any time that a manager wants to know how things stand financially. Some businesses — particularly financial institutions such as banks, mutual funds, and securities brokers — need balance sheets at the end of each day, in order to track their day-to-day financial situation.</p>\n<p>For most businesses, however, balance sheets are prepared only at the end of each month, quarter, and year. A balance sheet is always prepared at the close of business on the last day of the profit period. In other words, the balance sheet should be in sync with the income statement.</p>\n"},{"title":"The basic steps of bookkeeping","thumb":null,"image":null,"content":"<p>Bookkeeping can be made simpler if you follow a logical set of steps. Here are three fundamental concepts that can help keep things in order when handling the books for a business.</p>\n<ol class=\"level-one\">\n<li>\n<p class=\"first-para\">Prepare source documents for all transactions, operations, and other business events; source documents are the starting point in the bookkeeping process.</p>\n<p class=\"child-para\">When buying products, a business gets a purchase invoice from the supplier. When borrowing money from the bank, a business signs a promissory note payable, a copy of which the business keeps. When a customer uses a credit card to buy the business’s product, the business gets the credit card slip as evidence of the transaction. When preparing payroll cheques, a business depends on salary rosters and time cards.</p>\n<p class=\"child-para\">All of these key business forms serve as sources of information into the bookkeeping system — in other words, information the bookkeeper uses in recording the financial effects of the business’s activities.</p>\n</li>\n<li>\n<p class=\"first-para\">Determine and enter in source documents the financial effects of the transactions and other business events.</p>\n<p class=\"child-para\">Transactions have financial effects that must be recorded — the business is better off, worse off, or at least “different off” as the result of its transactions. Examples of typical business transactions include paying employees, making sales to customers, borrowing money from the bank, and buying products to sell to customers.</p>\n<p class=\"child-para\">The bookkeeping process begins by determining the relevant information about each transaction. The business’s chief accountant establishes the rules and methods for measuring the financial effects of transactions. Of course, the bookkeeper should comply with these rules and methods.</p>\n</li>\n<li>\n<p class=\"first-para\">Make original entries of financial effects into journals and accounts, with appropriate references to source documents.</p>\n<p class=\"child-para\">Using the source document(s) for every transaction, the bookkeeper makes the first, or original, entry into a journal and then into the business’s accounts. Only the official, established chart of accounts should be used in recording transactions.</p>\n<p class=\"child-para\">A journal is a chronological record of transactions in the order in which they occur — like a very detailed personal diary. In contrast, an account is a separate record, or page as it were, for each asset, each liability, and so on. One transaction affects two or more accounts. The journal entry records the whole transaction in one place; then each piece is recorded in the two or more accounts that are affected by the transaction.</p>\n<p class=\"child-para\">Entering transaction data correctly and in a timely manner is critically important. The prevalence of data entry errors was one important reason why most retailers started to use cash registers that read barcode information on products, which more accurately captures the necessary information and speeds up the data entry.</p>\n</li>\n<li>\n<p class=\"first-para\"><b></b>Perform end-of-period procedures — the critical steps for getting the accounting records up-to-date and ready for the preparation of management accounting reports, tax returns, and financial statements.</p>\n<p class=\"child-para\">A period is a stretch of time — from one day to one month to one quarter (three months) to one year — that is determined by the business’s needs. A year is the longest period of time that a business would wait to prepare its financial statements. Most businesses need accounting reports and financial statements at the end of each quarter, and many need monthly financial statements.</p>\n</li>\n<li>\n<p class=\"first-para\">Compile the adjusted trial balance for the accountant, which is the basis for preparing reports, tax returns, and financial statements.</p>\n<p class=\"child-para\">After all the end-of-period procedures have been completed, the bookkeeper compiles a complete listing of all accounts, which is called the adjusted trial balance. Modest-sized businesses maintain hundreds of accounts for their various assets, liabilities, owners’ equity, revenue, and expenses.</p>\n<p class=\"child-para\">Larger businesses keep thousands of accounts, and very large businesses may keep more than 10,000 accounts. In contrast, external financial statements, tax returns, and internal accounting reports to managers contain a relatively small number of accounts. For example, a typical external balance sheet reports only 25 to 30 accounts (maybe even fewer), and a typical income tax return contains a relatively small number of accounts.</p>\n<p class=\"child-para\">The accountant takes the adjusted trial balance and groups similar accounts into one summary amount that is reported in a financial report or tax return. For example, a business may keep hundreds of separate inventory accounts, every one of which is listed in the adjusted trial balance. The accountant collapses all these accounts into one summary inventory account that is presented in the business’s external balance sheet. In grouping the accounts, the accountant should comply with established financial reporting standards and income tax requirements.</p>\n</li>\n<li>\n<p class=\"first-para\">Close the books — bring the bookkeeping for the fiscal year just ended to a close and get things ready to begin the bookkeeping process for the coming fiscal year.</p>\n<p class=\"child-para\">Books is the common term for a business’s complete set of accounts. A business’s transactions are a constant stream of activities that don’t end tidily on the last day of the year, which can make preparing financial statements and tax returns challenging. The business has to draw a clear line of demarcation between activities for the year (the 12-month accounting period) ended and the year yet to come by closing the books for one year and starting with fresh books for the next year.</p>\n</li>\n</ol>\n"}],"videoInfo":{"videoId":null,"name":null,"accountId":null,"playerId":null,"thumbnailUrl":null,"description":null,"uploadDate":null}},"sponsorship":{"sponsorshipPage":false,"backgroundImage":{"src":null,"width":0,"height":0},"brandingLine":"","brandingLink":"","brandingLogo":{"src":null,"width":0,"height":0}},"primaryLearningPath":"Advance","lifeExpectancy":"One year","lifeExpectancySetFrom":"2022-03-25T00:00:00+00:00","dummiesForKids":"no","sponsoredContent":"no","adInfo":"","adPairKey":[]},"status":"publish","visibility":"public","articleId":207626},{"headers":{"creationTime":"2018-06-02T03:01:41+00:00","modifiedTime":"2022-03-08T15:34:59+00:00","timestamp":"2022-06-22T19:37:24+00:00"},"data":{"breadcrumbs":[{"name":"Business, Careers, & Money","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34224"},"slug":"business-careers-money","categoryId":34224},{"name":"Business","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34225"},"slug":"business","categoryId":34225},{"name":"Accounting","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34226"},"slug":"accounting","categoryId":34226},{"name":"Calculation & Analysis","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34229"},"slug":"calculation-analysis","categoryId":34229}],"title":"Finite Math For Dummies Cheat Sheet","strippedTitle":"finite math for dummies cheat sheet","slug":"finite-math-dummies-cheat-sheet","canonicalUrl":"","seo":{"metaDescription":"Keep these numbers, notations, distributions, and listings right at hand when performing computations found in Finite Math topics.","noIndex":0,"noFollow":0},"content":"When performing the many types of computations found in Finite Math topics, it’s helpful to have some numbers, notations, distributions, and listings right at hand.","description":"When performing the many types of computations found in Finite Math topics, it’s helpful to have some numbers, notations, distributions, and listings right at hand.","blurb":"","authors":[{"authorId":8985,"name":"Mary Jane Sterling","slug":"mary-jane-sterling","description":" \t <p><b>Mary Jane Sterling</b> is the author of numerous <i>For Dummies</i> books. She has been teaching at Bradley University in Peoria, Illinois, for more than 25 years. ","_links":{"self":"https://dummies-api.dummies.com/v2/authors/8985"}}],"primaryCategoryTaxonomy":{"categoryId":34229,"title":"Calculation & Analysis","slug":"calculation-analysis","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34229"}},"secondaryCategoryTaxonomy":{"categoryId":0,"title":null,"slug":null,"_links":null},"tertiaryCategoryTaxonomy":{"categoryId":0,"title":null,"slug":null,"_links":null},"trendingArticles":null,"inThisArticle":[],"relatedArticles":{"fromBook":[{"articleId":254831,"title":"Important Terms in Game Theory","slug":"important-terms-game-theory","categoryList":["business-careers-money","business","accounting","calculation-analysis"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/254831"}},{"articleId":254827,"title":"How to Create a Matrix from a Transition Diagram","slug":"create-matrix-transition-diagram","categoryList":["business-careers-money","business","accounting","calculation-analysis"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/254827"}},{"articleId":254821,"title":"How to Use Transition Matrices","slug":"use-transition-matrices","categoryList":["business-careers-money","business","accounting","calculation-analysis"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/254821"}},{"articleId":254814,"title":"How to Analyze Arguments with Euler Diagrams","slug":"analyze-arguments-euler-diagrams","categoryList":["business-careers-money","business","accounting","calculation-analysis"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/254814"}},{"articleId":254811,"title":"How to Analyze Compound Statements","slug":"analyze-compound-statements","categoryList":["business-careers-money","business","accounting","calculation-analysis"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/254811"}}],"fromCategory":[{"articleId":254831,"title":"Important Terms in Game Theory","slug":"important-terms-game-theory","categoryList":["business-careers-money","business","accounting","calculation-analysis"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/254831"}},{"articleId":254827,"title":"How to Create a Matrix from a Transition Diagram","slug":"create-matrix-transition-diagram","categoryList":["business-careers-money","business","accounting","calculation-analysis"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/254827"}},{"articleId":254821,"title":"How to Use Transition Matrices","slug":"use-transition-matrices","categoryList":["business-careers-money","business","accounting","calculation-analysis"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/254821"}},{"articleId":254814,"title":"How to Analyze Arguments with Euler Diagrams","slug":"analyze-arguments-euler-diagrams","categoryList":["business-careers-money","business","accounting","calculation-analysis"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/254814"}},{"articleId":254811,"title":"How to Analyze Compound Statements","slug":"analyze-compound-statements","categoryList":["business-careers-money","business","accounting","calculation-analysis"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/254811"}}]},"hasRelatedBookFromSearch":false,"relatedBook":{"bookId":282200,"slug":"finite-math-for-dummies","isbn":"9781119476368","categoryList":["business-careers-money","business","accounting","calculation-analysis"],"amazon":{"default":"https://www.amazon.com/gp/product/1119476364/ref=as_li_tl?ie=UTF8&tag=wiley01-20","ca":"https://www.amazon.ca/gp/product/1119476364/ref=as_li_tl?ie=UTF8&tag=wiley01-20","indigo_ca":"http://www.tkqlhce.com/click-9208661-13710633?url=https://www.chapters.indigo.ca/en-ca/books/product/1119476364-item.html&cjsku=978111945484","gb":"https://www.amazon.co.uk/gp/product/1119476364/ref=as_li_tl?ie=UTF8&tag=wiley01-20","de":"https://www.amazon.de/gp/product/1119476364/ref=as_li_tl?ie=UTF8&tag=wiley01-20"},"image":{"src":"https://www.dummies.com/wp-content/uploads/finite-math-for-dummies-cover-9781119476368-203x255.jpg","width":203,"height":255},"title":"Finite Math For Dummies","testBankPinActivationLink":"","bookOutOfPrint":false,"authorsInfo":"<p><b data-author-id=\"8985\">Mary Jane Sterling</b> is the author of <i>Algebra I For Dummies, Algebra Workbook For Dummies,</i> and many other <i>For Dummies</i> books. She taught at Bradley University in Peoria, Illinois for more than 30 years, teaching algebra, business calculus, geometry, and finite mathematics. </p>","authors":[{"authorId":8985,"name":"Mary Jane Sterling","slug":"mary-jane-sterling","description":" \t <p><b>Mary Jane Sterling</b> is the author of numerous <i>For Dummies</i> books. She has been teaching at Bradley University in Peoria, Illinois, for more than 25 years. ","_links":{"self":"https://dummies-api.dummies.com/v2/authors/8985"}}],"_links":{"self":"https://dummies-api.dummies.com/v2/books/"}},"collections":[],"articleAds":{"footerAd":"<div class=\"du-ad-region row\" id=\"article_page_adhesion_ad\"><div class=\"du-ad-unit col-md-12\" data-slot-id=\"article_page_adhesion_ad\" data-refreshed=\"false\" \r\n data-target = \"[{&quot;key&quot;:&quot;cat&quot;,&quot;values&quot;:[&quot;business-careers-money&quot;,&quot;business&quot;,&quot;accounting&quot;,&quot;calculation-analysis&quot;]},{&quot;key&quot;:&quot;isbn&quot;,&quot;values&quot;:[&quot;9781119476368&quot;]}]\" id=\"du-slot-62b36f740c956\"></div></div>","rightAd":"<div class=\"du-ad-region row\" id=\"article_page_right_ad\"><div class=\"du-ad-unit col-md-12\" data-slot-id=\"article_page_right_ad\" data-refreshed=\"false\" \r\n data-target = \"[{&quot;key&quot;:&quot;cat&quot;,&quot;values&quot;:[&quot;business-careers-money&quot;,&quot;business&quot;,&quot;accounting&quot;,&quot;calculation-analysis&quot;]},{&quot;key&quot;:&quot;isbn&quot;,&quot;values&quot;:[&quot;9781119476368&quot;]}]\" id=\"du-slot-62b36f740d0a8\"></div></div>"},"articleType":{"articleType":"Cheat Sheet","articleList":[{"articleId":252743,"title":"Pascal’s Triangle","slug":"pascals-triangle","categoryList":["business-careers-money","business","accounting","calculation-analysis"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/252743"}},{"articleId":252748,"title":"Binomial Distributions","slug":"finite-math-binomial-distributions","categoryList":["business-careers-money","business","accounting","calculation-analysis"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/252748"}},{"articleId":252753,"title":"Matrix Notation","slug":"matrix-notation","categoryList":["business-careers-money","business","accounting","calculation-analysis"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/252753"}},{"articleId":252758,"title":"Factorial","slug":"factorial","categoryList":["business-careers-money","business","accounting","calculation-analysis"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/252758"}}],"content":[{"title":"Pascal's triangle","thumb":null,"image":null,"content":"<p>When performing computations in problems involving probability and statistics, it’s often helpful to have the binomial coefficients found in Pascal’s triangle. These numbers are the results of finding combinations of <em>n</em> things taken <em>k</em> at a time. For quick reference, the first ten rows of the triangle are shown.</p>\n<p><img loading=\"lazy\" class=\"alignnone size-full wp-image-252745\" src=\"https://www.dummies.com/wp-content/uploads/finitemath-pascals.jpg\" alt=\"finitemath-pascals\" width=\"433\" height=\"200\" /></p>\n"},{"title":"Binomial distributions","thumb":null,"image":null,"content":"<p>A common situation when doing probability problems is having to determine the patterns of heads-and-tails, boys-and-girls, true-or-false arrangements. When there are two choices, there are 2<em><sup>n</sup></em> ways that they can occur. The following refer to Heads-or-Tails in a coin-flipping situation but can be adapted to any binomial arrangement.</p>\n<p><img loading=\"lazy\" class=\"alignnone size-full wp-image-252749\" src=\"https://www.dummies.com/wp-content/uploads/finitemath-one-toss.jpg\" alt=\"finitemath-one-toss\" width=\"535\" height=\"989\" /></p>\n"},{"title":"Matrix notation","thumb":null,"image":null,"content":"<p>Matrices are rectangular arrangements of elements. The dimension of a matrix is given with <em>m</em> × <em>n</em> where <em>m</em> is the number of rows and <em>n </em>is the number of columns. The elements are identified with subscripts giving the row, <em>j</em>, and column,<em> k</em>, shown as <em>a<sub>jk</sub></em> for the elements of a matrix A.</p>\n<p><img loading=\"lazy\" class=\"alignnone size-full wp-image-252754\" src=\"https://www.dummies.com/wp-content/uploads/Matrix-A.jpg\" alt=\"Matrix-A\" width=\"535\" height=\"335\" /></p>\n<p>When multiplying the matrices, the number of rows in the first matrix has to equal the number of columns in the second. Given matrices A and B where A has dimension 2 × 3 and B has the dimension3 × 2, the resulting matrices are found as follows:</p>\n<p><img loading=\"lazy\" class=\"alignnone size-full wp-image-252755\" src=\"https://www.dummies.com/wp-content/uploads/Matrix-B.jpg\" alt=\"Matrix-B\" width=\"535\" height=\"191\" /></p>\n"},{"title":"Factorial","thumb":null,"image":null,"content":"<p>The factorial operation says to multiply the designated number by every positive integer smaller than that number.</p>\n<p><em>n</em>! = <em>n</em> (<em>n</em> – 1) (<em>n</em> – 2)   3 2 1</p>\n<p>When using the operation in the formulas for the number of permutations or combinations of <em>n</em> things taken <em>k</em> at a time, factorial values need to be inserted into the numerator and denominator of the fraction. The first sixteen factorial values are given here. And, by definition, 0! = 1.</p>\n<table>\n<tbody>\n<tr>\n<td width=\"53\"><em>n</em></td>\n<td width=\"108\"><em>n</em>!</td>\n<td width=\"60\"><em>n</em></td>\n<td width=\"168\"><em>n</em>!</td>\n</tr>\n<tr>\n<td width=\"53\">1</td>\n<td width=\"108\">1</td>\n<td width=\"60\">9</td>\n<td width=\"168\">362,880</td>\n</tr>\n<tr>\n<td width=\"53\">2</td>\n<td width=\"108\">2</td>\n<td width=\"60\">10</td>\n<td width=\"168\">3,628,800</td>\n</tr>\n<tr>\n<td width=\"53\">3</td>\n<td width=\"108\">6</td>\n<td width=\"60\">11</td>\n<td width=\"168\">39,916,800</td>\n</tr>\n<tr>\n<td width=\"53\">4</td>\n<td width=\"108\">24</td>\n<td width=\"60\">12</td>\n<td width=\"168\">479,001,600</td>\n</tr>\n<tr>\n<td width=\"53\">5</td>\n<td width=\"108\">120</td>\n<td width=\"60\">13</td>\n<td width=\"168\">6,227,020,800</td>\n</tr>\n<tr>\n<td width=\"53\">6</td>\n<td width=\"108\">720</td>\n<td width=\"60\">14</td>\n<td width=\"168\">87,178,291,200</td>\n</tr>\n<tr>\n<td width=\"53\">7</td>\n<td width=\"108\">5,040</td>\n<td width=\"60\">15</td>\n<td width=\"168\">1,307,674,368,000</td>\n</tr>\n<tr>\n<td width=\"53\">8</td>\n<td width=\"108\">40,320</td>\n<td width=\"60\">16</td>\n<td width=\"168\">20,922,789,888,000</td>\n</tr>\n</tbody>\n</table>\n"}],"videoInfo":{"videoId":null,"name":null,"accountId":null,"playerId":null,"thumbnailUrl":null,"description":null,"uploadDate":null}},"sponsorship":{"sponsorshipPage":false,"backgroundImage":{"src":null,"width":0,"height":0},"brandingLine":"","brandingLink":"","brandingLogo":{"src":null,"width":0,"height":0}},"primaryLearningPath":"Advance","lifeExpectancy":"Five years","lifeExpectancySetFrom":"2022-03-08T00:00:00+00:00","dummiesForKids":"no","sponsoredContent":"no","adInfo":"","adPairKey":[]},"status":"publish","visibility":"public","articleId":252761},{"headers":{"creationTime":"2016-03-27T16:56:32+00:00","modifiedTime":"2022-03-03T21:43:13+00:00","timestamp":"2022-06-22T19:37:22+00:00"},"data":{"breadcrumbs":[{"name":"Business, Careers, & Money","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34224"},"slug":"business-careers-money","categoryId":34224},{"name":"Business","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34225"},"slug":"business","categoryId":34225},{"name":"Accounting","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34226"},"slug":"accounting","categoryId":34226},{"name":"Bookkeeping","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34228"},"slug":"bookkeeping","categoryId":34228}],"title":"Nonprofit Bookkeeping & Accounting For Dummies Cheat Sheet","strippedTitle":"nonprofit bookkeeping & accounting for dummies cheat sheet","slug":"nonprofit-bookkeeping-accounting-for-dummies-cheat-sheet","canonicalUrl":"","seo":{"metaDescription":"Keep your finger on the pulse of your nonprofit's budget and expenses with these handy reminders and tasks.","noIndex":0,"noFollow":0},"content":"To stay organized and on top of your nonprofit’s bookkeeping and accounting responsibilities, complete tasks that need to be done daily, weekly, quarterly, and yearly. Keep necessary financial information up-to-date so you’re prepared to submit paperwork to the government and to the people involved in your nonprofit organization who plan your budget.","description":"To stay organized and on top of your nonprofit’s bookkeeping and accounting responsibilities, complete tasks that need to be done daily, weekly, quarterly, and yearly. Keep necessary financial information up-to-date so you’re prepared to submit paperwork to the government and to the people involved in your nonprofit organization who plan your budget.","blurb":"","authors":[{"authorId":10392,"name":"Sharon Farris","slug":"sharon-farris","description":" <p><b>Sharon Farris</b> has been involved in the grants industry for more than ten years. She is the president of Farris Accounting & Consulting Training Services (FACT$) as well as the former president of the American Association of Grant Professionals (AAGP) Montgomery.</p> ","_links":{"self":"https://dummies-api.dummies.com/v2/authors/10392"}}],"primaryCategoryTaxonomy":{"categoryId":34228,"title":"Bookkeeping","slug":"bookkeeping","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34228"}},"secondaryCategoryTaxonomy":{"categoryId":34246,"title":"Nonprofits","slug":"nonprofits","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34246"}},"tertiaryCategoryTaxonomy":{"categoryId":0,"title":null,"slug":null,"_links":null},"trendingArticles":null,"inThisArticle":[],"relatedArticles":{"fromBook":[{"articleId":192926,"title":"Annual Reminders for Your Nonprofit Business","slug":"annual-reminders-for-your-nonprofit-business","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/192926"}},{"articleId":192924,"title":"Weekly Reminders for Your Nonprofit Organization","slug":"weekly-reminders-for-your-nonprofit-organization","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/192924"}},{"articleId":192917,"title":"Quarterly Accounting Reminders for Your Nonprofit Organization","slug":"quarterly-accounting-reminders-for-your-nonprofit-organization","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/192917"}},{"articleId":192918,"title":"Monthly Budgeting Tasks for Your Nonprofit Organization","slug":"monthly-budgeting-tasks-for-your-nonprofit-organization","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/192918"}}],"fromCategory":[{"articleId":275290,"title":"Break-Even Point Formula for Businesses","slug":"break-even-point-formula-for-businesses","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/275290"}},{"articleId":265567,"title":"Accounting and Financial Reporting Standards","slug":"accounting-and-financial-reporting-standards","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/265567"}},{"articleId":265558,"title":"Internal Profit Reporting","slug":"internal-profit-reporting","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/265558"}},{"articleId":208436,"title":"Bookkeeping For Dummies Cheat Sheet","slug":"bookkeeping-for-dummies-cheat-sheet","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/208436"}},{"articleId":208256,"title":"Bookkeeping for Canadians For Dummies Cheat Sheet","slug":"bookkeeping-for-canadians-for-dummies-cheat-sheet","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/208256"}}]},"hasRelatedBookFromSearch":false,"relatedBook":{"bookId":282422,"slug":"nonprofit-bookkeeping-and-accounting-for-dummies","isbn":"9780470432365","categoryList":["business-careers-money","business","accounting","bookkeeping"],"amazon":{"default":"https://www.amazon.com/gp/product/0470432365/ref=as_li_tl?ie=UTF8&tag=wiley01-20","ca":"https://www.amazon.ca/gp/product/0470432365/ref=as_li_tl?ie=UTF8&tag=wiley01-20","indigo_ca":"http://www.tkqlhce.com/click-9208661-13710633?url=https://www.chapters.indigo.ca/en-ca/books/product/0470432365-item.html&cjsku=978111945484","gb":"https://www.amazon.co.uk/gp/product/0470432365/ref=as_li_tl?ie=UTF8&tag=wiley01-20","de":"https://www.amazon.de/gp/product/0470432365/ref=as_li_tl?ie=UTF8&tag=wiley01-20"},"image":{"src":"https://www.dummies.com/wp-content/uploads/nonprofit-bookkeeping-and-accounting-for-dummies-cover-9780470432365-203x255.jpg","width":203,"height":255},"title":"Nonprofit Bookkeeping and Accounting For Dummies","testBankPinActivationLink":"","bookOutOfPrint":false,"authorsInfo":"<p>Sharon Farris has been involved in the grants industry for more than ten years. She is the president of Farris Accounting &amp; Consulting Training Services (FACT$) as well as the former president of the American Association of Grant Professionals (AAGP) Montgomery.</p>","authors":[{"authorId":10392,"name":"Sharon Farris","slug":"sharon-farris","description":" <p><b>Sharon Farris</b> has been involved in the grants industry for more than ten years. She is the president of Farris Accounting & Consulting Training Services (FACT$) as well as the former president of the American Association of Grant Professionals (AAGP) Montgomery.</p> ","_links":{"self":"https://dummies-api.dummies.com/v2/authors/10392"}}],"_links":{"self":"https://dummies-api.dummies.com/v2/books/"}},"collections":[],"articleAds":{"footerAd":"<div class=\"du-ad-region row\" id=\"article_page_adhesion_ad\"><div class=\"du-ad-unit col-md-12\" data-slot-id=\"article_page_adhesion_ad\" data-refreshed=\"false\" \r\n data-target = \"[{&quot;key&quot;:&quot;cat&quot;,&quot;values&quot;:[&quot;business-careers-money&quot;,&quot;business&quot;,&quot;accounting&quot;,&quot;bookkeeping&quot;]},{&quot;key&quot;:&quot;isbn&quot;,&quot;values&quot;:[&quot;9780470432365&quot;]}]\" id=\"du-slot-62b36f72f4038\"></div></div>","rightAd":"<div class=\"du-ad-region row\" id=\"article_page_right_ad\"><div class=\"du-ad-unit col-md-12\" data-slot-id=\"article_page_right_ad\" data-refreshed=\"false\" \r\n data-target = \"[{&quot;key&quot;:&quot;cat&quot;,&quot;values&quot;:[&quot;business-careers-money&quot;,&quot;business&quot;,&quot;accounting&quot;,&quot;bookkeeping&quot;]},{&quot;key&quot;:&quot;isbn&quot;,&quot;values&quot;:[&quot;9780470432365&quot;]}]\" id=\"du-slot-62b36f730059e\"></div></div>"},"articleType":{"articleType":"Cheat Sheet","articleList":[{"articleId":192924,"title":"Weekly Reminders for Your Nonprofit Organization","slug":"weekly-reminders-for-your-nonprofit-organization","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/192924"}},{"articleId":192918,"title":"Monthly Budgeting Tasks for Your Nonprofit Organization","slug":"monthly-budgeting-tasks-for-your-nonprofit-organization","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/192918"}},{"articleId":192917,"title":"Quarterly Accounting Reminders for Your Nonprofit Organization","slug":"quarterly-accounting-reminders-for-your-nonprofit-organization","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/192917"}},{"articleId":192926,"title":"Annual Reminders for Your Nonprofit Business","slug":"annual-reminders-for-your-nonprofit-business","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/192926"}}],"content":[{"title":"Weekly reminders for your nonprofit organization","thumb":null,"image":null,"content":"<p>To ensure your nonprofit’s daily activities are completed, organize a weekly to-do list and prioritize the tasks so the important ones are done first and other jobs are scheduled around them. Managing your nonprofit means sticking to your plan to stay organized and run efficiently. Apply these guidelines to your nonprofit’s weekly plan:</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\"><b>Set up daily priorities.</b> Knowing what you need to accomplish each day allows you to take care of the most pressing matters.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Surround yourself with professional staff.</b> Surrounding yourself with professionals eliminates the pettiness of daily office drama! Professionals are self-motivated and focused on doing their jobs, and they require minimum supervision.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Keep your goals before you.</b> To maintain a clear vision, keep your eyes on the prize. Post your vision or your goals in a place where they’re visible to you every day.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Manage your time by planning and scheduling your daily activities.</b> Be mindful of distractions that pull you away from completing your tasks.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Stay out of politics.</b> Avoiding politics at work protects your nonprofit’s status.</p>\n</li>\n</ul>\n"},{"title":"Monthly budgeting tasks for your nonprofit organization","thumb":null,"image":null,"content":"<p>As a director or manager of a nonprofit, you require monthly budget assessments to track and manage your nonprofit’s finances. Monthly meetings, which should happen after a cost-benefit analysis, should involve your finance committee, budget staff, and/or budget task force. These meetings should go over management efficiency and include these items:</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\"><b>Review budget projections and compare the projected budget to actual results.</b> To ensure that you have revenues to take care of expenses, evaluate what happened the previous month and what the impact will be on future months. Make adjustments to future planned actions based on your actual results to date.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Trim the fat from your budget.</b> Analyze every line item and look for ways to cut costs.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Seek ways to cut variable costs.</b> To do so, change them to fixed costs or eliminate them altogether.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Meet with your budget task group to analyze every cost and get rid of unnecessary ones.</b> Consider everything that will keep you efficient without compromising program quality.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Submit grant proposals and contracts to stabilize your funding streams.</b> Be aggressive in seizing funding opportunities to sustain and expand your organization’s existing programs while adding new ones.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Search your local newspaper for new businesses in your area that may support your cause.</b> Find out what their areas of interest are and talk to them about working together.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Look for ways to collaborate with other nonprofits in your community.</b> Form partnerships with larger nonprofits for fundraising activities.</p>\n</li>\n</ul>\n"},{"title":"Quarterly accounting reminders for your nonprofit organization","thumb":null,"image":null,"content":"<p>To analyze the financial health of your nonprofit organization, the board of directors needs quarterly financial statements, which monitor the flow of revenue. Likewise, for taxes, grants, and contracts, quarterly reports are required by federal and state government organizations. Make sure to take care of the following nonprofit accounting tasks:</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\"><b>Report payroll taxes to the IRS at the end of the quarter by submitting Form 941.</b> The Federal Insurance Contributions Act (FICA) taxes are funds for the payment of old-age, survivors, and medical benefits. Employers must pay 7.65 percent of an employee’s gross salary to the IRS.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Prepare quarterly financial statements for your board of directors.</b> Your board needs to know your financial status to plan future activities and to offset potential financial problems.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Complete quarterly financial status reports for government grants and contracts.</b> The government expects you to track all expenditures and submit a report of what you have spent and how much you have left according to your records.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Complete quarterly progress reports for government grants and contracts.</b> Quarterly progress reports indicate performance results in terms of numbers. They evaluate your progress by comparing what you expected to accomplish with what actually happened.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Meet with your board of directors.</b> Your board must meet at least four times a year to fulfill federal and state requirements.</p>\n</li>\n</ul>\n"},{"title":"Annual reminders for your nonprofit business","thumb":null,"image":null,"content":"<p>Running a nonprofit requires that you annually prepare and submit paperwork to your employees, the Board of Directors, the Social Security Administration, and the IRS. Each year, you should evaluate your nonprofit’s progress, go over your strategic plan, and celebrate the year’s successes. This list represents tasks you should complete yearly:</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\"><b>Submit Form 990, Annual Information Report, to the IRS.</b> This form is where you report all financial activities to the IRS. It reveals your financial strengths and weaknesses, sources of income, and how you’re spending your funds. This information helps the government determine whether you’re engaging in activities that could cause you to jeopardize your tax-exempt status.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Submit annual payroll reports to the Social Security Administration, IRS, and your employees.</b> Form 941 is due no later than January 31. W-2s, W-3s, and 1099s must be handled properly.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Contact a CPA to audit your financial statements.</b> Having audited records is like getting a professional second opinion about the validity of your financial health. It adds credibility to your record-keeping and accounting practices.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Celebrate your success and hard work with your staff and board members by having an annual office party.</b> Reward everyone for a job well done.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Organize your budget task force for the next year.</b> Single out the analytical minds or penny-pinchers on your staff and board. These folks will make up your budget task force, which assesses all budget costs and does a benefit analysis of each line item.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Organize a proposal development team for the next year.</b> Find three people who are organized, enjoy reading technical stuff, and are willing to write. Then organize them into your proposal development team to research, develop, and submit grant applications and contracts for your organization.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Prepare for your annual board meeting by re-evaluating your organization’s goals.</b> Cross out goals you’ve met and develop new goals for the upcoming year.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Declutter your office files and prepare for the next year.</b> Getting rid of the clutter frees your mind and saves time. It’s important that you know where things are and can put your hands on them when needed.</p>\n</li>\n</ul>\n"}],"videoInfo":{"videoId":null,"name":null,"accountId":null,"playerId":null,"thumbnailUrl":null,"description":null,"uploadDate":null}},"sponsorship":{"sponsorshipPage":false,"backgroundImage":{"src":null,"width":0,"height":0},"brandingLine":"","brandingLink":"","brandingLogo":{"src":null,"width":0,"height":0}},"primaryLearningPath":"Advance","lifeExpectancy":"Two years","lifeExpectancySetFrom":"2022-03-03T00:00:00+00:00","dummiesForKids":"no","sponsoredContent":"no","adInfo":"","adPairKey":[]},"status":"publish","visibility":"public","articleId":209083},{"headers":{"creationTime":"2016-03-27T16:56:22+00:00","modifiedTime":"2022-02-28T17:17:34+00:00","timestamp":"2022-06-22T19:37:21+00:00"},"data":{"breadcrumbs":[{"name":"Business, Careers, & Money","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34224"},"slug":"business-careers-money","categoryId":34224},{"name":"Business","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34225"},"slug":"business","categoryId":34225},{"name":"Accounting","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34226"},"slug":"accounting","categoryId":34226},{"name":"General Accounting","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34230"},"slug":"general-accounting","categoryId":34230}],"title":"Accounting Workbook For Dummies Cheat Sheet","strippedTitle":"accounting workbook for dummies cheat sheet","slug":"accounting-workbook-for-dummies-cheat-sheet","canonicalUrl":"","seo":{"metaDescription":"Keep track of these formulas and ways to present information as you're preparing financial statements while handling accounting.","noIndex":0,"noFollow":0},"content":"As a business manager, taking care of your company’s accounting needs is top priority. Correctly preparing a financial statement involves knowing all the information that needs to appear on the statement. Making a profit keeps you in business, so follow the financial statements closely, make adjustments if needed, and follow some basic rules for presenting accounting information to your business’s managers.","description":"As a business manager, taking care of your company’s accounting needs is top priority. Correctly preparing a financial statement involves knowing all the information that needs to appear on the statement. Making a profit keeps you in business, so follow the financial statements closely, make adjustments if needed, and follow some basic rules for presenting accounting information to your business’s managers.","blurb":"","authors":[{"authorId":9472,"name":"John A. Tracy","slug":"john-a-tracy","description":"John A. Tracy, CPA, is professor of accounting, emeritus, at the University of Colorado in Boulder.","_links":{"self":"https://dummies-api.dummies.com/v2/authors/9472"}}],"primaryCategoryTaxonomy":{"categoryId":34230,"title":"General Accounting","slug":"general-accounting","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34230"}},"secondaryCategoryTaxonomy":{"categoryId":0,"title":null,"slug":null,"_links":null},"tertiaryCategoryTaxonomy":{"categoryId":0,"title":null,"slug":null,"_links":null},"trendingArticles":null,"inThisArticle":[],"relatedArticles":{"fromBook":[{"articleId":192701,"title":"Formulas and Functions for Financial Statements","slug":"formulas-and-functions-for-financial-statements","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/192701"}},{"articleId":192700,"title":"Making Accounting Adjustments to Reach Profit Potential","slug":"making-accounting-adjustments-to-reach-profit-potential","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/192700"}},{"articleId":189270,"title":"Knowing Your Debits from Your Credits","slug":"knowing-your-debits-from-your-credits","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/189270"}},{"articleId":189255,"title":"Choosing an Accounting Method for Your Business","slug":"choosing-an-accounting-method-for-your-business","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/189255"}},{"articleId":189109,"title":"Classifications of Business Transactions","slug":"classifications-of-business-transactions","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/189109"}}],"fromCategory":[{"articleId":277438,"title":"Financial Accounting: The Effect of Business Transactions","slug":"financial-accounting-the-effect-of-business-transactions","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/277438"}},{"articleId":277429,"title":"What Are Accounting Journals?","slug":"what-are-accounting-journals","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/277429"}},{"articleId":277423,"title":"How to Read Corporate Annual Reports","slug":"how-to-read-corporate-annual-reports","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/277423"}},{"articleId":277418,"title":"Showing the Money: The Statement of Cash Flows","slug":"showing-the-money-the-statement-of-cash-flows","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/277418"}},{"articleId":277410,"title":"10 Accounting Career Opportunities","slug":"10-accounting-career-opportunities","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/277410"}}]},"hasRelatedBookFromSearch":false,"relatedBook":{"bookId":281923,"slug":"accounting-workbook-for-dummies","isbn":"9780471791454","categoryList":["business-careers-money","business","accounting","general-accounting"],"amazon":{"default":"https://www.amazon.com/gp/product/0471791458/ref=as_li_tl?ie=UTF8&tag=wiley01-20","ca":"https://www.amazon.ca/gp/product/0471791458/ref=as_li_tl?ie=UTF8&tag=wiley01-20","indigo_ca":"http://www.tkqlhce.com/click-9208661-13710633?url=https://www.chapters.indigo.ca/en-ca/books/product/0471791458-item.html&cjsku=978111945484","gb":"https://www.amazon.co.uk/gp/product/0471791458/ref=as_li_tl?ie=UTF8&tag=wiley01-20","de":"https://www.amazon.de/gp/product/0471791458/ref=as_li_tl?ie=UTF8&tag=wiley01-20"},"image":{"src":"https://www.dummies.com/wp-content/uploads/accounting-workbook-for-dummies-cover-9780471791454-193x255.jpg","width":193,"height":255},"title":"Accounting Workbook For Dummies","testBankPinActivationLink":"","bookOutOfPrint":false,"authorsInfo":"<b data-author-id=\"34814\">John A. Tracy</b> is a former accountant and professor of accounting. He is also the author of Accounting For Dummies.","authors":[{"authorId":34814,"name":"John A. Tracy","slug":"john-a.-tracy","description":" <p><b>John A. Tracy, CPA,</b> is professor of accounting, emeritus, at the University of Colorado in Boulder. Earlier in his career, he was a staff accountant with Ernst &amp; Young.</p> <p><b>C&eacute;cile Laurin, CPA, CA,</b> is a professor of accounting at Algonquin College of Applied Arts and Technology in Ottawa. She has been chief financial officer for three engineering firms and a law firm.</p>","_links":{"self":"https://dummies-api.dummies.com/v2/authors/34814"}}],"_links":{"self":"https://dummies-api.dummies.com/v2/books/"}},"collections":[],"articleAds":{"footerAd":"<div class=\"du-ad-region row\" id=\"article_page_adhesion_ad\"><div class=\"du-ad-unit col-md-12\" data-slot-id=\"article_page_adhesion_ad\" data-refreshed=\"false\" \r\n data-target = \"[{&quot;key&quot;:&quot;cat&quot;,&quot;values&quot;:[&quot;business-careers-money&quot;,&quot;business&quot;,&quot;accounting&quot;,&quot;general-accounting&quot;]},{&quot;key&quot;:&quot;isbn&quot;,&quot;values&quot;:[&quot;9780471791454&quot;]}]\" id=\"du-slot-62b36f716572b\"></div></div>","rightAd":"<div class=\"du-ad-region row\" id=\"article_page_right_ad\"><div class=\"du-ad-unit col-md-12\" data-slot-id=\"article_page_right_ad\" data-refreshed=\"false\" \r\n data-target = \"[{&quot;key&quot;:&quot;cat&quot;,&quot;values&quot;:[&quot;business-careers-money&quot;,&quot;business&quot;,&quot;accounting&quot;,&quot;general-accounting&quot;]},{&quot;key&quot;:&quot;isbn&quot;,&quot;values&quot;:[&quot;9780471791454&quot;]}]\" id=\"du-slot-62b36f7165e64\"></div></div>"},"articleType":{"articleType":"Cheat Sheet","articleList":[{"articleId":192701,"title":"Formulas and Functions for Financial Statements","slug":"formulas-and-functions-for-financial-statements","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/192701"}},{"articleId":192700,"title":"Making Accounting Adjustments to Reach Profit Potential","slug":"making-accounting-adjustments-to-reach-profit-potential","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/192700"}}],"content":[{"title":"Formulas and functions for financial statements","thumb":null,"image":null,"content":"<p>As the business manager, you’re in control of your business’s accounting needs, so you need a strong understanding of the ins and outs of financial statements, including what goes on them and in what order. If you don’t prepare them correctly, they won’t reflect a true picture of your business’s financial status. Keep the following important rules and points in mind as you prepare and use your business’s financial statements.</p>\n<h2>Accounting equation</h2>\n<p>Assets = Liabilities + Owners’ Equity</p>\n<p>Liabilities and owners’ equity are the two basic types of claims on the assets of an entity. The two-sided nature of the accounting equation is the basis for double entry accounting that records both sides of the entity’s transactions — what is received and what is given in the economic exchange.</p>\n<h2>Rules for debits and credits</h2>\n<p>Use the following figure for credit and debit basics:</p>\n<p><img loading=\"lazy\" src=\"https://www.dummies.com/wp-content/uploads/194324.image0.jpg\" alt=\"image0.jpg\" width=\"535\" height=\"212\" /></p>\n<h2>Financial effects of revenues and expenses</h2>\n<p>Revenue = Asset increase (debit) or Liability decrease (debit)<br />\nExpense = Asset decrease (credit) or Liability increase (credit)</p>\n<h2>Connections between income statement and balance sheet accounts</h2>\n<p>Sales revenue → Cash and Accounts receivable</p>\n<p>Cost of goods sold expense ← Inventory</p>\n<p>Operating expenses → Cash</p>\n<p>Operating expenses ← Prepaid expenses</p>\n<p>Operating expenses → Accounts payable</p>\n<p>Operating expenses → Accrued expenses payable</p>\n<p>Depreciation expense ← Fixed assets</p>\n<p>Interest expense → Accrued expenses payable</p>\n<p>Income tax expense → Accrued expenses payable</p>\n<h2>Bookkeeping cycle</h2>\n<p>Transactions (and certain other events) → Original Entries in Journals → Postings in General Ledger Chart of Accounts → End-of-Period Adjusting Entries → Preparation of Financial Statements, Tax Returns, and Internal Accounting Reports → Closing Entries at End of Year</p>\n"},{"title":"Making accounting adjustments to reach profit potential","thumb":null,"image":null,"content":"<p>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 (and legal) accounting adjustments to your financial records as needed. These helpful tips can help you make the necessary adjustments to your business’s net income, eye two different profit analysis models, and communicate the reports to your managers.</p>\n<h2>Adjustments to net income for determining sash flow from operating activities</h2>\n<p>Accounts receivable, inventory, and prepaid expenses are operating assets used in the profit-making process.</p>\n<p>Accounts payable and accrued expenses payable are operating liabilities used in the profit-making process.</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\">Operating asset increases and operating liability decreases are negative adjustments (decrease cash flow from operating activities)</p>\n</li>\n<li>\n<p class=\"first-para\">Operating asset decreases and operating liability increases are positive adjustments (increase cash flow from operating activities)</p>\n</li>\n<li>\n<p class=\"first-para\">Depreciation and amortization expenses are positive adjustments (increase cash flow from operating activities)</p>\n</li>\n</ul>\n<p><b>Cardinal Rule:</b> Make all cash flow adjustments to net income; do not simply add back depreciation and amortization, which could be seriously misleading.</p>\n<h2>Two profit analysis models for management decision making</h2>\n<p><b>Contribution margin minus fixed expenses model</b><b>:</b></p>\n<table>\n<tbody>\n<tr>\n<td>Sales price</td>\n<td>$100</td>\n</tr>\n<tr>\n<td>Less variable costs per unit</td>\n<td><u>$60</u></td>\n</tr>\n<tr>\n<td>Equals contribution margin per unit</td>\n<td>$40</td>\n</tr>\n<tr>\n<td>Times annual sales volume, in units</td>\n<td><u>120,000</u></td>\n</tr>\n<tr>\n<td>Equals total contribution margin</td>\n<td>$4,800,000</td>\n</tr>\n<tr>\n<td>Less fixed operating expenses</td>\n<td><u>$3,000,000</u></td>\n</tr>\n<tr>\n<td>Equals operating profit</td>\n<td>$1,800,000</td>\n</tr>\n</tbody>\n</table>\n<p><b>Excess of sales over breakeven model:</b></p>\n<p>$3,000,000 annual fixed operating expenses ÷ $40 contribution margin per unit = 75,000 units breakeven point (volume)</p>\n<table>\n<tbody>\n<tr>\n<td>Annual sales volume for year, in units</td>\n<td>120,000</td>\n</tr>\n<tr>\n<td>Less annual breakeven volume, in units</td>\n<td><u>75,000</u></td>\n</tr>\n<tr>\n<td>Equals excess over breakeven, in units</td>\n<td>45,000</td>\n</tr>\n<tr>\n<td>Times contribution margin per unit</td>\n<td><u>$40</u></td>\n</tr>\n<tr>\n<td>Equals operating profit</td>\n<td>$1,800,000</td>\n</tr>\n</tbody>\n</table>\n<h2>Guidelines for internal accounting reports to managers</h2>\n<p>When you’re preparing financial information for your business’s managers, follow these tips:</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\">Follow the organizational structure (responsibility accounting)</p>\n</li>\n<li>\n<p class=\"first-para\">Orient your report based on whether organization unit is a profit center or a cost center</p>\n</li>\n<li>\n<p class=\"first-para\">Know the mind of the manager</p>\n</li>\n<li>\n<p class=\"first-para\">Highlight significant factors and deemphasize non-significant factors</p>\n</li>\n</ul>\n"}],"videoInfo":{"videoId":null,"name":null,"accountId":null,"playerId":null,"thumbnailUrl":null,"description":null,"uploadDate":null}},"sponsorship":{"sponsorshipPage":false,"backgroundImage":{"src":null,"width":0,"height":0},"brandingLine":"","brandingLink":"","brandingLogo":{"src":null,"width":0,"height":0}},"primaryLearningPath":"Advance","lifeExpectancy":"Two years","lifeExpectancySetFrom":"2022-02-28T00:00:00+00:00","dummiesForKids":"no","sponsoredContent":"no","adInfo":"","adPairKey":[]},"status":"publish","visibility":"public","articleId":209042},{"headers":{"creationTime":"2016-03-27T16:47:33+00:00","modifiedTime":"2022-02-28T16:44:23+00:00","timestamp":"2022-06-22T19:37:21+00:00"},"data":{"breadcrumbs":[{"name":"Business, Careers, & Money","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34224"},"slug":"business-careers-money","categoryId":34224},{"name":"Business","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34225"},"slug":"business","categoryId":34225},{"name":"Accounting","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34226"},"slug":"accounting","categoryId":34226},{"name":"General Accounting","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34230"},"slug":"general-accounting","categoryId":34230}],"title":"1,001 Accounting Practice Problems For Dummies Cheat Sheet","strippedTitle":"1,001 accounting practice problems for dummies cheat sheet","slug":"1001-accounting-practice-problems-for-dummies-cheat-sheet","canonicalUrl":"","seo":{"metaDescription":"Sharpen your math skills and study up on some of the most important formulas you'll need for accounting practice.","noIndex":0,"noFollow":0},"content":"Accounting, as you may guess, involves a lot of math. As you practice various types of accounting problems, and when you begin doing accounting work for real, you will need to utilize various formulas to calculate the information you need.","description":"Accounting, as you may guess, involves a lot of math. As you practice various types of accounting problems, and when you begin doing accounting work for real, you will need to utilize various formulas to calculate the information you need.","blurb":"","authors":[{"authorId":9050,"name":"Kenneth Boyd","slug":"kenneth-boyd","description":"Ken Boyd, a former CPA, has more than 37 years of experience in accounting, education, and financial services. He is the owner of Accounting Accidentally (<a href=\"https://www.accountingaccidentally.com/\" target=\"_blank\" rel=\"noopener\">www.accountingaccidentally.com</a>), which provides written and video content on accounting, personal finance, and entrepreneurship topics. His YouTube channel (<a href=\"https://www.youtube.com/user/kenboydstl\" target=\"_blank\" rel=\"noopener\">kenboydstl</a>) has hundreds of videos on accounting and finance.\r\n\r\nIn recent years, Boyd has served as an adjunct professor of accounting at the Cook School of Business at St. Louis University. He has written hundreds of articles for QuickBooks, Investopedia, and a number of other publications.","_links":{"self":"https://dummies-api.dummies.com/v2/authors/9050"}},{"authorId":9051,"name":"Kate Mooney","slug":"kate-mooney","description":" <p><b>Kenneth Boyd</b> is the owner of St. Louis Test Preparation &#40;www.stltest.net&#41;. He provides online tutoring in accounting and finance. Kenneth has worked as a CPA, Auditor, Tax Preparer, and College Professor. He is the author of <i>CPA Exam For Dummies</i>. <b>Kate Mooney</b> has been teaching accounting to both undergraduates and MBA students at St. Cloud State University since 1986, after earning her PhD from Texas A &#38; M University. She is a licensed CPA in Minnesota and is a member of the State Board of Accountancy. 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He provides online tutoring in accounting and finance. Kenneth has worked as a CPA, Auditor, Tax Preparer, and College Professor. He is the author of <i>CPA Exam For Dummies</i>. <b data-author-id=\"9051\">Kate Mooney</b> has been teaching accounting to both undergraduates and MBA students at St. Cloud State University since 1986, after earning her PhD from Texas A &amp; M University. She is a licensed CPA in Minnesota and is a member of the State Board of Accountancy. </p>","authors":[{"authorId":34810,"name":"Kenneth W. Boyd","slug":"kenneth-w.-boyd","description":" <p><b>Kenneth W. Boyd</b> has 30 years of experience in accounting and financial services. He is a four&#45;time Dummies book author, a blogger, and a video host on accounting and finance topics. ","_links":{"self":"https://dummies-api.dummies.com/v2/authors/34810"}},{"authorId":9051,"name":"Kate Mooney","slug":"kate-mooney","description":" <p><b>Kenneth Boyd</b> is the owner of St. Louis Test Preparation &#40;www.stltest.net&#41;. He provides online tutoring in accounting and finance. Kenneth has worked as a CPA, Auditor, Tax Preparer, and College Professor. He is the author of <i>CPA Exam For Dummies</i>. <b>Kate Mooney</b> has been teaching accounting to both undergraduates and MBA students at St. Cloud State University since 1986, after earning her PhD from Texas A &#38; M University. She is a licensed CPA in Minnesota and is a member of the State Board of Accountancy. ","_links":{"self":"https://dummies-api.dummies.com/v2/authors/9051"}}],"_links":{"self":"https://dummies-api.dummies.com/v2/books/"}},"collections":[],"articleAds":{"footerAd":"<div class=\"du-ad-region row\" id=\"article_page_adhesion_ad\"><div class=\"du-ad-unit col-md-12\" data-slot-id=\"article_page_adhesion_ad\" data-refreshed=\"false\" \r\n data-target = \"[{&quot;key&quot;:&quot;cat&quot;,&quot;values&quot;:[&quot;business-careers-money&quot;,&quot;business&quot;,&quot;accounting&quot;,&quot;general-accounting&quot;]},{&quot;key&quot;:&quot;isbn&quot;,&quot;values&quot;:[&quot;9781118853283&quot;]}]\" id=\"du-slot-62b36f71344c2\"></div></div>","rightAd":"<div class=\"du-ad-region row\" id=\"article_page_right_ad\"><div class=\"du-ad-unit col-md-12\" data-slot-id=\"article_page_right_ad\" data-refreshed=\"false\" \r\n data-target = \"[{&quot;key&quot;:&quot;cat&quot;,&quot;values&quot;:[&quot;business-careers-money&quot;,&quot;business&quot;,&quot;accounting&quot;,&quot;general-accounting&quot;]},{&quot;key&quot;:&quot;isbn&quot;,&quot;values&quot;:[&quot;9781118853283&quot;]}]\" id=\"du-slot-62b36f7134c0d\"></div></div>"},"articleType":{"articleType":"Cheat Sheet","articleList":[{"articleId":145405,"title":"10 Useful Accounting Formulas","slug":"10-useful-accounting-formulas","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/145405"}},{"articleId":145404,"title":"Financial Statement Formulas","slug":"financial-statement-formulas","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/145404"}},{"articleId":145398,"title":"More Financial Analysis Formulas","slug":"more-financial-analysis-formulas","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/145398"}}],"content":[{"title":"10 useful accounting formulas","thumb":null,"image":null,"content":"<p>The following are some of the most frequently used accounting formulas. This list is not comprehensive, but it should cover the items you’ll use most often as you practice solving various accounting problems.</p>\n<h2>Balance sheet formula</h2>\n<p>Assets – liabilities = equity (or assets = liabilities + equity)</p>\n<p>This basic formula must stay in balance to generate an accurate balance sheet. This means that all accounting transactions must keep the formula in balance. If not, the accountant has made an error.</p>\n<h2>Retained earnings formula</h2>\n<p>Beginning balance + net income – net losses – dividends = ending balance</p>\n<h2>Income statement formula</h2>\n<p>Revenue (sales) – expenses = profit (or net income)</p>\n<p>Keep in mind that revenue and sales may be used interchangeably. Profit and net income may also be used interchangeably. The income statement is also referred to as a <i>profit and loss statement.</i></p>\n<h2>Gross margin</h2>\n<p>Sales – cost of sales</p>\n<p>Gross margin is not a company’s net income or profit. Other expenses, such as selling, general, and administrative (SG and A) expenses, are subtracted to arrive at net income.</p>\n<h2>Operating income (earnings)</h2>\n<p>Gross profit – selling, general, and administrative (SG and A) expenses</p>\n<h2>Statement of cash flows formula</h2>\n<p>Beginning cash balance + cash flow sources (uses) from operations + cash flow sources (uses) from financing + cash flow sources (uses) from investing = ending cash balance</p>\n<p>This formula adds cash sources and subtracts cash uses.</p>\n<h2>Inventory formula</h2>\n<p>Beginning inventory + purchases – cost of sales = ending inventory (or beginning inventory + purchases – ending inventory = cost of sales)</p>\n<h2>Net sales formula</h2>\n<p>Gross sales – sales discounts – sales returns and allowances</p>\n<h2>Book value of fixed (depreciable) assets</h2>\n<p>Original cost – accumulated depreciation</p>\n<h2>Straight line depreciation</h2>\n<p>(Original cost – salvage value) / number of years in useful life</p>\n<p><i>Salvage </i><i>value </i>is the dollar amount that the owner can receive for selling the asset at the end of its useful life.</p>\n"},{"title":"Financial statement formulas","thumb":null,"image":null,"content":"<p>After you create financial statements, you need some tools to analyze a company’s results. Following are the most frequently used formulas to analyze financial statements. Get familiar with them so that you can analyze statements with confidence.</p>\n<h2>Components of work-in-process</h2>\n<p>Direct materials + direct labor + factory overhead applied</p>\n<p>Work-in-process (WIP) represents cost incurred in production for partially completed goods. WIP is a subaccount within inventory. When goods are completed, they are moved to finished goods (another inventory account).</p>\n<h2>Current ratio</h2>\n<p>Current assets ÷ current liabilities</p>\n<p>The current ratio illustrates how easily a company can cover its current bills.</p>\n<h2>Quick ratio</h2>\n<p>(Current assets less inventory) ÷ current liabilities</p>\n<p>The quick ratio excludes inventory from current assets. The rationale is that inventory is the current asset that will take the longest time to convert into cash. Other current assets, such as collecting accounts receivable, may be converted into cash more quickly.</p>\n<h2>Asset turnover ratio</h2>\n<p>Revenue (or sales) ÷ assets</p>\n<p>This ratio explains how much profit a company generates for every dollar of assets.</p>\n<h2>Return on equity</h2>\n<p>Net income ÷ equity</p>\n<p>This ratio explains how much profit a company generates for every dollar of equity.</p>\n<h2>Debt to equity ratio</h2>\n<p>Debt ÷ equity</p>\n<p>This ratio measures what percentage of a firm’s total capitalization is debt. Capitalization refers to all funds raised by the company to operate the business.</p>\n<h2>Contribution margin</h2>\n<p>Sales less variable costs</p>\n<p>Contribution margin represents the amount that will be used to cover fixed costs. Any dollars remaining after paying fixed costs is considered profit.</p>\n<h2>Return on capital</h2>\n<p>Operating profit ÷ capital</p>\n<p>Capital is similar to equity. It represents funds raised to operate a business. Operating profit refers to profit generated from normal business activity.</p>\n<h2>Break-even formula</h2>\n<p>Sales – variable costs – fixed costs = $0 profit</p>\n<p>The break-even formula calculates the level of sales that will generate a profit of $0.</p>\n<h2>Formula to assign overhead costs</h2>\n<p>Total overhead costs incurred ÷ activity level</p>\n<p>Overhead costs, such as a factory’s utility costs, can’t be directly traced to a product. Instead, overhead costs are allocated based on an activity level. The activity level chosen should impact the amount of overhead costs incurred. For example, the number of machine hours used drives machinery repair costs. Machine hours should be the activity level for machine repair costs.</p>\n"},{"title":"More financial analysis formulas","thumb":null,"image":null,"content":"<p>After you create financial statements, you need some tools to analyze the company’s results. Following are some additional formulas accountants use to analyze financial statements. Become familiar with these formulas, and use them as you practice various accounting problems.</p>\n<h2>Burden rate</h2>\n<p>Fixed manufacturing costs ÷ units produced</p>\n<p>Fixed costs can’t be directly traced to a unit produced. For example, a $50,000 monthly factory lease must be paid, regardless of the number of units produced in a given month. To assign fixed cost to each unit of product, companies used the burden rate.</p>\n<h2>Cost of idle capacity</h2>\n<p>Percentage of available capacity unused × fixed manufacturing overhead costs</p>\n<p><i>Idle capacity</i> refers to unused capacity. Assume you could produce 20% more baseball gloves this month, using your existing factory costs (materials, labor, and overhead). Say that the factory pays a foreman $50,000 in salary and benefits to supervise production. The cost of idle capacity is 20% multiplied by $50,000, or $10,000. The firm is paying an extra $10,000 for production capacity it’s not using.</p>\n<h2>Calculating loan interest</h2>\n<p>Interest rate for period × principal amount of loan</p>\n<p>Interest can be compounded (computed) annually, monthly, or even daily. Pay attention to the stated annual interest rate on the loan and how often interest is compounded. If a 12% loan is compounded monthly, the monthly interest rate is 12% ÷ 12 months, or 1%.</p>\n<h2>Effective interest rate</h2>\n<p>Interest paid ÷ principal amount owed</p>\n<p>Because of the effects of compounding, the actual interest paid on a loan may be different from the stated interest rate on the note multiplied by the principal.</p>\n<h2>Present value and future value factors</h2>\n<p>Present value factor less than 1; future value factor more than 1</p>\n<p>A present value factor discounts a cash flow to its present value. To calculate the present value, you multiply the factor times the cash flow amount. A present value factor will be less than 1. The future value of a cash flow adjusts the cash flow to its future value, given an interest rate. A future value factor will always be more than 1.</p>\n<h2>Return on investment (ROI)</h2>\n<p>Profit (net income) from investment ÷ cost of investment</p>\n<p>A more complex version of the formula is operating income divided by operating assets. Operating assets represent an investment in a project or business. The purpose of this formula is to determine the profitability of a given project.</p>\n<h2>Return on investment (DuPont model)</h2>\n<p>Profit margin × asset turnover</p>\n<p>This is a more complex formula that’s used for ROI. Profit margin is operating profit divided by sales. Asset turnover is calculated as sales divided by average assets. Average assets refers to assets at beginning of period + assets balance at end of period ÷ 2.</p>\n<h2>Return of investment to shareholders</h2>\n<p>Retained earnings balance – payments to shareholders</p>\n<p>A <i>dividend</i> is a payment of retained earnings to shareholders (investors). If a company makes payments to shareholders that are greater than the balance of retained earnings, those payments are a return of the investors’ original investment.</p>\n<h2>Rule of 72</h2>\n<p>72 ÷ rate of return on investment</p>\n<p>The <i>rule of 72</i> states how many years it will take for a sum of money to double, given a rate of return that is compounded each year. If, for example, the rate of return is 8%, a sum of money will double in 72÷8, or 9 years.</p>\n<h2>Weighted average cost of capital (WACC)</h2>\n<p>Annual cost to obtain financing ÷ capital balance</p>\n<p>Companies can raise funds by issuing debt or equity. Outstanding debt requires annual interest payments. Shareholders who purchase equity may also insist on required annual dividend payments. Interest payments on debt and dividend payments to shareholders are both considered financing costs. The annual cost of financing divided by the funds raised to operate the business (capital) is WACC.</p>\n"}],"videoInfo":{"videoId":null,"name":null,"accountId":null,"playerId":null,"thumbnailUrl":null,"description":null,"uploadDate":null}},"sponsorship":{"sponsorshipPage":false,"backgroundImage":{"src":null,"width":0,"height":0},"brandingLine":"","brandingLink":"","brandingLogo":{"src":null,"width":0,"height":0}},"primaryLearningPath":"Advance","lifeExpectancy":"One year","lifeExpectancySetFrom":"2022-02-15T00:00:00+00:00","dummiesForKids":"no","sponsoredContent":"no","adInfo":"","adPairKey":[]},"status":"publish","visibility":"public","articleId":207571},{"headers":{"creationTime":"2016-03-27T16:51:44+00:00","modifiedTime":"2022-02-25T19:58:48+00:00","timestamp":"2022-06-22T19:37:20+00:00"},"data":{"breadcrumbs":[{"name":"Business, Careers, & Money","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34224"},"slug":"business-careers-money","categoryId":34224},{"name":"Business","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34225"},"slug":"business","categoryId":34225},{"name":"Accounting","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34226"},"slug":"accounting","categoryId":34226},{"name":"Bookkeeping","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34228"},"slug":"bookkeeping","categoryId":34228}],"title":"Bookkeeping for Canadians For Dummies Cheat Sheet","strippedTitle":"bookkeeping for canadians for dummies cheat sheet","slug":"bookkeeping-for-canadians-for-dummies-cheat-sheet","canonicalUrl":"","seo":{"metaDescription":"Become an accurate and efficient bookkeeper by learning double-entry bookkeeping, current ratio, and much more.","noIndex":0,"noFollow":0},"content":"Bookkeepers take care of all the financial data for businesses. Accurate and complete financial bookkeeping is crucial to any business’s decision makers: owner, outside investors, creditors, bank and even its employees. Keeping a close eye on your day-to-day business operations can help you be a Canadian small-business success story.","description":"Bookkeepers take care of all the financial data for businesses. Accurate and complete financial bookkeeping is crucial to any business’s decision makers: owner, outside investors, creditors, bank and even its employees. Keeping a close eye on your day-to-day business operations can help you be a Canadian small-business success story.","blurb":"","authors":[],"primaryCategoryTaxonomy":{"categoryId":34228,"title":"Bookkeeping","slug":"bookkeeping","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34228"}},"secondaryCategoryTaxonomy":{"categoryId":0,"title":null,"slug":null,"_links":null},"tertiaryCategoryTaxonomy":{"categoryId":0,"title":null,"slug":null,"_links":null},"trendingArticles":null,"inThisArticle":[],"relatedArticles":{"fromBook":[],"fromCategory":[{"articleId":275290,"title":"Break-Even Point Formula for Businesses","slug":"break-even-point-formula-for-businesses","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/275290"}},{"articleId":265567,"title":"Accounting and Financial Reporting Standards","slug":"accounting-and-financial-reporting-standards","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/265567"}},{"articleId":265558,"title":"Internal Profit Reporting","slug":"internal-profit-reporting","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/265558"}},{"articleId":209083,"title":"Nonprofit Bookkeeping & Accounting For Dummies Cheat Sheet","slug":"nonprofit-bookkeeping-accounting-for-dummies-cheat-sheet","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/209083"}},{"articleId":208436,"title":"Bookkeeping For Dummies Cheat Sheet","slug":"bookkeeping-for-dummies-cheat-sheet","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/208436"}}]},"hasRelatedBookFromSearch":false,"relatedBook":{"bookId":282009,"slug":"bookkeeping-for-canadians-for-dummies-3rd-edition","isbn":"9781119522133","categoryList":["business-careers-money","business","accounting","bookkeeping"],"amazon":{"default":"https://www.amazon.com/gp/product/1119522137/ref=as_li_tl?ie=UTF8&tag=wiley01-20","ca":"https://www.amazon.ca/gp/product/1119522137/ref=as_li_tl?ie=UTF8&tag=wiley01-20","indigo_ca":"http://www.tkqlhce.com/click-9208661-13710633?url=https://www.chapters.indigo.ca/en-ca/books/product/1119522137-item.html&cjsku=978111945484","gb":"https://www.amazon.co.uk/gp/product/1119522137/ref=as_li_tl?ie=UTF8&tag=wiley01-20","de":"https://www.amazon.de/gp/product/1119522137/ref=as_li_tl?ie=UTF8&tag=wiley01-20"},"image":{"src":"https://www.dummies.com/wp-content/uploads/bookkeeping-for-canadians-for-dummies-3rd-edition-cover-9781119522133-203x255.jpg","width":203,"height":255},"title":"Bookkeeping For Canadians For Dummies","testBankPinActivationLink":"","bookOutOfPrint":true,"authorsInfo":"<p><b><b data-author-id=\"8974\">Lita Epstein</b>, MBA,</b> designs online courses about reading financial reports, investing, and taxes. She&#8217;s the author of <i>Reading Financial Reports For Dummies</i> and also writes periodically for AOL&#8217;s Daily Finance. </p> <p><b>Lita Epstein, MBA</b> designs and teaches online courses on investing for retirement, getting ready for tax time, and finance and investing for women.</p> <p><b>C&eacute;cile Laurin, CPA, CA</b> is a Chartered Professional Accountant and teacher based in Ottawa.</p>","authors":[{"authorId":8974,"name":"Lita Epstein","slug":"lita-epstein","description":" <p><b>Lita Epstein, MBA,</b> designs online courses about reading financial reports, investing, and taxes. She&#8217;s the author of <i>Reading Financial Reports For Dummies</i> and also writes periodically for AOL&#8217;s Daily Finance. </p> ","_links":{"self":"https://dummies-api.dummies.com/v2/authors/8974"}},{"authorId":34419,"name":"Cecile Laurin","slug":"cecile-laurin","description":" <p><b>Lita Epstein, MBA</b> designs and teaches online courses on investing for retirement, getting ready for tax time, and finance and investing for women.</p> <p><b>C&eacute;cile Laurin, CPA, CA</b> is a Chartered Professional Accountant and teacher based in Ottawa.</p>","_links":{"self":"https://dummies-api.dummies.com/v2/authors/34419"}}],"_links":{"self":"https://dummies-api.dummies.com/v2/books/"}},"collections":[],"articleAds":{"footerAd":"<div class=\"du-ad-region row\" id=\"article_page_adhesion_ad\"><div class=\"du-ad-unit col-md-12\" data-slot-id=\"article_page_adhesion_ad\" data-refreshed=\"false\" \r\n data-target = \"[{&quot;key&quot;:&quot;cat&quot;,&quot;values&quot;:[&quot;business-careers-money&quot;,&quot;business&quot;,&quot;accounting&quot;,&quot;bookkeeping&quot;]},{&quot;key&quot;:&quot;isbn&quot;,&quot;values&quot;:[&quot;9781119522133&quot;]}]\" id=\"du-slot-62b36f70aabbc\"></div></div>","rightAd":"<div class=\"du-ad-region row\" id=\"article_page_right_ad\"><div class=\"du-ad-unit col-md-12\" data-slot-id=\"article_page_right_ad\" data-refreshed=\"false\" \r\n data-target = \"[{&quot;key&quot;:&quot;cat&quot;,&quot;values&quot;:[&quot;business-careers-money&quot;,&quot;business&quot;,&quot;accounting&quot;,&quot;bookkeeping&quot;]},{&quot;key&quot;:&quot;isbn&quot;,&quot;values&quot;:[&quot;9781119522133&quot;]}]\" id=\"du-slot-62b36f70ab31f\"></div></div>"},"articleType":{"articleType":"Cheat Sheet","articleList":[{"articleId":174245,"title":"The Nuts and Bolts of Bookkeeping","slug":"the-nuts-and-bolts-of-bookkeeping","categoryList":[],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/174245"}},{"articleId":174247,"title":"Accounting for Debits and Credits in Double-Entry Bookkeeping","slug":"accounting-for-debits-and-credits-in-double-entry-bookkeeping","categoryList":[],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/174247"}},{"articleId":174251,"title":"Current Ratio: A Valuable Tool for Bookkeepers","slug":"current-ratio-a-valuable-tool-for-bookkeepers","categoryList":[],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/174251"}},{"articleId":174246,"title":"Best Bookkeeping Practices to Help You Manage Your Business","slug":"best-bookkeeping-practices-to-help-you-manage-your-business","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/174246"}},{"articleId":174242,"title":"How to Control Your Business Cash","slug":"how-to-control-your-business-cash","categoryList":[],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/174242"}}],"content":[{"title":"The nuts and bolts of bookkeeping","thumb":null,"image":null,"content":"<p>Every bookkeeping system has a few consistent elements. Here is a list of what your business requires to ensure that it’s bookkeeping by the book:</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\"><b>Chart of Accounts:</b> Lists all accounts in the books and is the road map of a business’s financial transactions</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Journals:</b> Place in the books where transactions are first entered</p>\n</li>\n<li>\n<p class=\"first-para\"><b>General Ledger:</b> The book that summarizes all a business’s account transactions</p>\n</li>\n</ul>\n"},{"title":"Accounting for debits and credits in double-entry bookkeeping","thumb":null,"image":null,"content":"<p>In double-entry bookkeeping, you enter all transactions in the books <em>twice</em>: once as a debit and once as a credit. This chart shows you how debits and credits affect your various business bookkeeping accounts.</p>\n<table>\n<tbody>\n<tr>\n<th>Account Type</th>\n<th>Debits</th>\n<th>Credits</th>\n</tr>\n<tr>\n<td>Assets</td>\n<td>Increase</td>\n<td>Decrease</td>\n</tr>\n<tr>\n<td>Liabilities</td>\n<td>Decrease</td>\n<td>Increase</td>\n</tr>\n<tr>\n<td>Equity</td>\n<td>Decrease</td>\n<td>Increase</td>\n</tr>\n<tr>\n<td>Drawings</td>\n<td>Increase</td>\n<td>Decrease</td>\n</tr>\n<tr>\n<td>Revenue</td>\n<td>Decrease</td>\n<td>Increase</td>\n</tr>\n<tr>\n<td>Expenses</td>\n<td>Increase</td>\n<td>Decrease</td>\n</tr>\n</tbody>\n</table>\n"},{"title":"Current ratio: a valuable tool for bookkeepers","thumb":null,"image":null,"content":"<p>Bookkeepers use the current ratio to compare the current assets of a business to its current liabilities. This ratio provides a quick glimpse of your business’s ability to pay its bills. The formula for calculating the current ratio is</p>\n<p>Current assets ÷ Current liabilities = Current ratio</p>\n<p>The following is an example of a current ratio calculation:</p>\n<p>$5,200 ÷ $2,200 = 2.36 (current ratio)</p>\n<p>Lenders usually look for current ratios of 1.2 to 2, so any bank would consider a current ratio of 2.36 a good sign. A current ratio under 1 is considered a danger sign because that indicates that the business doesn’t have enough current assets to pay its current bills.</p>\n"},{"title":"Best bookkeeping practices to help you manage your business","thumb":null,"image":null,"content":"<p>Regardless of the size of your business, efficient bookkeeping practices are essential to keep any business running smoothly. Here are some helpful hints to help you streamline your bookkeeping process:</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\">Set up a chart of accounts that best keeps track of all your bookkeeping information.</p>\n</li>\n<li>\n<p class=\"first-para\">Balance and record daily sales and cash receipts daily.</p>\n</li>\n<li>\n<p class=\"first-para\">Reconcile your bank account.</p>\n</li>\n<li>\n<p class=\"first-para\">Watch closely your accounts receivable from customers.</p>\n</li>\n<li>\n<p class=\"first-para\">Pay your bills accurately and on time.</p>\n</li>\n<li>\n<p class=\"first-para\">Set up sales and revenue targets and monitor your progress closely.</p>\n</li>\n<li>\n<p class=\"first-para\">Budget for all your expenses and compare your performance to budget regularly.</p>\n</li>\n<li>\n<p class=\"first-para\">Watch for unusual changes in sales or expenses.</p>\n</li>\n<li>\n<p class=\"first-para\">Monitor your gross profit closely and make any necessary pricing or purchases decisions.</p>\n</li>\n<li>\n<p class=\"first-para\">Take care of slow moving inventory.</p>\n</li>\n<li>\n<p class=\"first-para\">Pay your employee withholding taxes and GST/HST when due.</p>\n</li>\n<li>\n<p class=\"first-para\">Take physical counts of your inventory and compare to your bookkeeping records.</p>\n</li>\n</ul>\n"},{"title":"How to control your business cash","thumb":null,"image":null,"content":"<p>Bookkeeping is all about keeping tabs on where your business’s cash is. Here are a few handy tips that will ensure that your bookkeeping doesn’t require too much red ink so your small business can thrive:</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\"><b>Separate cash handlers.</b> Be sure that the person who accepts cash isn’t also recording the transaction.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Separate authorization responsibilities.</b> Be sure that the person who authorizes a payment isn’t also signing the cheque or paying out cash.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Separate the duties of your bookkeeping function to ensure a good system of checks and balances.</b> Don’t put too much trust in one person — unless it’s yourself.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Separate operational responsibility (actual day-to-day transactions) from record-keeping responsibility (entering transactions in the books).</b></p>\n</li>\n<li>\n<p class=\"first-para\"><b>Reconcile the bank account. </b>Assign this task to someone who is not handling cash or making bookkeeping entries. Review the reconciliation carefully.</p>\n</li>\n</ul>\n"}],"videoInfo":{"videoId":null,"name":null,"accountId":null,"playerId":null,"thumbnailUrl":null,"description":null,"uploadDate":null}},"sponsorship":{"sponsorshipPage":false,"backgroundImage":{"src":null,"width":0,"height":0},"brandingLine":"","brandingLink":"","brandingLogo":{"src":null,"width":0,"height":0}},"primaryLearningPath":"Advance","lifeExpectancy":"One year","lifeExpectancySetFrom":"2022-02-25T00:00:00+00:00","dummiesForKids":"no","sponsoredContent":"no","adInfo":"","adPairKey":[]},"status":"publish","visibility":"public","articleId":208256},{"headers":{"creationTime":"2016-03-27T16:47:01+00:00","modifiedTime":"2022-02-25T17:31:17+00:00","timestamp":"2022-06-22T19:37:20+00:00"},"data":{"breadcrumbs":[{"name":"Business, Careers, & Money","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34224"},"slug":"business-careers-money","categoryId":34224},{"name":"Business","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34225"},"slug":"business","categoryId":34225},{"name":"Accounting","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34226"},"slug":"accounting","categoryId":34226},{"name":"Bookkeeping","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34228"},"slug":"bookkeeping","categoryId":34228}],"title":"Bookkeeping All-in-One For Dummies Cheat Sheet","strippedTitle":"bookkeeping all-in-one for dummies cheat sheet","slug":"bookkeeping-all-in-one-for-dummies-cheat-sheet","canonicalUrl":"","seo":{"metaDescription":"Get an overview of a bookkeeper's job, which includes keeping track of the assets, liabilities, and equity for all types of companies.","noIndex":0,"noFollow":0},"content":"The title of bookkeeper brings up mental images of a quiet, shy individual who spends countless hours poring over columns of numbers. In reality, the job of a bookkeeper is of vital importance to any business that needs to account for its assets, liabilities, and equity. From the company founders to the investors to the IRS, the bookkeeper must be able to report the financial status by way of balance sheets and income statements and keep an organized and detailed paper trail of every financial transaction. This Cheat Sheet also describes the types of business structures with which bookkeepers must be familiar: sole proprietorships, partnerships, and limited liability companies.\r\n\r\n[caption id=\"attachment_263750\" align=\"alignnone\" width=\"533\"]<img class=\"size-full wp-image-263750\" src=\"https://www.dummies.com/wp-content/uploads/bookkeeping-balance-sheet.jpg\" alt=\"bookkeeper working with balance sheet\" width=\"533\" height=\"400\" /> ©By VectorKnight/Shutterstock.com[/caption]","description":"The title of bookkeeper brings up mental images of a quiet, shy individual who spends countless hours poring over columns of numbers. In reality, the job of a bookkeeper is of vital importance to any business that needs to account for its assets, liabilities, and equity. From the company founders to the investors to the IRS, the bookkeeper must be able to report the financial status by way of balance sheets and income statements and keep an organized and detailed paper trail of every financial transaction. This Cheat Sheet also describes the types of business structures with which bookkeepers must be familiar: sole proprietorships, partnerships, and limited liability companies.\r\n\r\n[caption id=\"attachment_263750\" align=\"alignnone\" width=\"533\"]<img class=\"size-full wp-image-263750\" src=\"https://www.dummies.com/wp-content/uploads/bookkeeping-balance-sheet.jpg\" alt=\"bookkeeper working with balance sheet\" width=\"533\" height=\"400\" /> ©By VectorKnight/Shutterstock.com[/caption]","blurb":"","authors":[{"authorId":8947,"name":"The Experts at Dummies","slug":"the-experts-at-dummies","description":"The Experts at Dummies are smart, friendly people who make learning easy by taking a not-so-serious approach to serious stuff.","_links":{"self":"https://dummies-api.dummies.com/v2/authors/8947"}}],"primaryCategoryTaxonomy":{"categoryId":34228,"title":"Bookkeeping","slug":"bookkeeping","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34228"}},"secondaryCategoryTaxonomy":{"categoryId":0,"title":null,"slug":null,"_links":null},"tertiaryCategoryTaxonomy":{"categoryId":0,"title":null,"slug":null,"_links":null},"trendingArticles":null,"inThisArticle":[],"relatedArticles":{"fromBook":[{"articleId":265567,"title":"Accounting and Financial Reporting Standards","slug":"accounting-and-financial-reporting-standards","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/265567"}},{"articleId":265558,"title":"Internal Profit Reporting","slug":"internal-profit-reporting","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/265558"}},{"articleId":188279,"title":"Types of Cost Data in Businesses","slug":"types-of-cost-data-in-businesses","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/188279"}},{"articleId":188170,"title":"Looking at Depreciation Expense Accounting Methods","slug":"looking-at-depreciation-expense-accounting-methods","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/188170"}},{"articleId":140817,"title":"Tax Reporting for Sole Proprietors, Partnerships, LLCs, and Corporations","slug":"tax-reporting-for-sole-proprietors","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/140817"}}],"fromCategory":[{"articleId":275290,"title":"Break-Even Point Formula for Businesses","slug":"break-even-point-formula-for-businesses","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/275290"}},{"articleId":265567,"title":"Accounting and Financial Reporting Standards","slug":"accounting-and-financial-reporting-standards","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/265567"}},{"articleId":265558,"title":"Internal Profit Reporting","slug":"internal-profit-reporting","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/265558"}},{"articleId":209083,"title":"Nonprofit Bookkeeping & Accounting For Dummies Cheat Sheet","slug":"nonprofit-bookkeeping-accounting-for-dummies-cheat-sheet","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/209083"}},{"articleId":208436,"title":"Bookkeeping For Dummies Cheat Sheet","slug":"bookkeeping-for-dummies-cheat-sheet","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/208436"}}]},"hasRelatedBookFromSearch":false,"relatedBook":{"bookId":282008,"slug":"bookkeeping-all-in-one-for-dummies-2nd-edition","isbn":"9781119592907","categoryList":["business-careers-money","business","accounting","bookkeeping"],"amazon":{"default":"https://www.amazon.com/gp/product/1119592909/ref=as_li_tl?ie=UTF8&tag=wiley01-20","ca":"https://www.amazon.ca/gp/product/1119592909/ref=as_li_tl?ie=UTF8&tag=wiley01-20","indigo_ca":"http://www.tkqlhce.com/click-9208661-13710633?url=https://www.chapters.indigo.ca/en-ca/books/product/1119592909-item.html&cjsku=978111945484","gb":"https://www.amazon.co.uk/gp/product/1119592909/ref=as_li_tl?ie=UTF8&tag=wiley01-20","de":"https://www.amazon.de/gp/product/1119592909/ref=as_li_tl?ie=UTF8&tag=wiley01-20"},"image":{"src":"https://www.dummies.com/wp-content/uploads/bookkeeping-all-in-one-for-dummies-2nd-edition-cover-9781119592907-203x255.jpg","width":203,"height":255},"title":"Bookkeeping All-in-One For Dummies","testBankPinActivationLink":"","bookOutOfPrint":true,"authorsInfo":"<p><b><b data-author-id=\"8974\">Lita Epstein</b>, MBA,</b> designs online courses about reading financial reports, investing, and taxes. She&#8217;s the author of <i>Reading Financial Reports For Dummies</i> and also writes periodically for AOL&#8217;s Daily Finance. </p> <p><b><b data-author-id=\"34814\">John A. Tracy</b>, CPA,</b> is professor of accounting, emeritus, at the University of Colorado in Boulder. Earlier in his career, he was a staff accountant with Ernst &amp; Young.</p> <p><b>C&eacute;cile Laurin, CPA, CA,</b> is a professor of accounting at Algonquin College of Applied Arts and Technology in Ottawa. She has been chief financial officer for three engineering firms and a law firm.</p>","authors":[{"authorId":8974,"name":"Lita Epstein","slug":"lita-epstein","description":" <p><b>Lita Epstein, MBA,</b> designs online courses about reading financial reports, investing, and taxes. She&#8217;s the author of <i>Reading Financial Reports For Dummies</i> and also writes periodically for AOL&#8217;s Daily Finance. </p> ","_links":{"self":"https://dummies-api.dummies.com/v2/authors/8974"}},{"authorId":34814,"name":"John A. Tracy","slug":"john-a.-tracy","description":" <p><b>John A. Tracy, CPA,</b> is professor of accounting, emeritus, at the University of Colorado in Boulder. Earlier in his career, he was a staff accountant with Ernst &amp; Young.</p> <p><b>C&eacute;cile Laurin, CPA, CA,</b> is a professor of accounting at Algonquin College of Applied Arts and Technology in Ottawa. She has been chief financial officer for three engineering firms and a law firm.</p>","_links":{"self":"https://dummies-api.dummies.com/v2/authors/34814"}}],"_links":{"self":"https://dummies-api.dummies.com/v2/books/"}},"collections":[],"articleAds":{"footerAd":"<div class=\"du-ad-region row\" id=\"article_page_adhesion_ad\"><div class=\"du-ad-unit col-md-12\" data-slot-id=\"article_page_adhesion_ad\" data-refreshed=\"false\" \r\n data-target = \"[{&quot;key&quot;:&quot;cat&quot;,&quot;values&quot;:[&quot;business-careers-money&quot;,&quot;business&quot;,&quot;accounting&quot;,&quot;bookkeeping&quot;]},{&quot;key&quot;:&quot;isbn&quot;,&quot;values&quot;:[&quot;9781119592907&quot;]}]\" id=\"du-slot-62b36f7007920\"></div></div>","rightAd":"<div class=\"du-ad-region row\" id=\"article_page_right_ad\"><div class=\"du-ad-unit col-md-12\" data-slot-id=\"article_page_right_ad\" data-refreshed=\"false\" \r\n data-target = \"[{&quot;key&quot;:&quot;cat&quot;,&quot;values&quot;:[&quot;business-careers-money&quot;,&quot;business&quot;,&quot;accounting&quot;,&quot;bookkeeping&quot;]},{&quot;key&quot;:&quot;isbn&quot;,&quot;values&quot;:[&quot;9781119592907&quot;]}]\" id=\"du-slot-62b36f7008152\"></div></div>"},"articleType":{"articleType":"Cheat Sheet","articleList":[{"articleId":141826,"title":"3 Financial Areas to Balance: Assets, Liabilities, and Equity","slug":"3-financial-areas-to-balance-assets-liabilities-and-equity","categoryList":[],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/141826"}},{"articleId":141823,"title":"The Balance Sheet and Income Statement","slug":"the-balance-sheet-and-income-statement","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/141823"}},{"articleId":141825,"title":"4 Types of Business Structures","slug":"4-types-of-business-structures","categoryList":["business-careers-money","business","accounting","bookkeeping"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/141825"}}],"content":[{"title":"3 financial areas to balance: Assets, liabilities and equity","thumb":null,"image":null,"content":"<p>Every business has three key financial parts that you, as the bookkeeper, must keep in balance: assets, liabilities, and equity. Following are the descriptions of these three terms:</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\"><b>Assets</b> include everything the company owns, such as cash, inventory, buildings, equipment, and vehicles.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Liabilities</b> include everything the company owes to others, such as vendor bills, credit card balances, and bank loans.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Equity</b> includes the claims owners have on the assets based on their portion of ownership in the company.</p>\n</li>\n</ul>\n<p>The formula for keeping your books in balance involves these three elements:</p>\n<blockquote><p>Assets = Liabilities + Equity</p></blockquote>\n"},{"title":"The balance sheet and income statement","thumb":null,"image":null,"content":"<p>Most businesses prepare at least two key financial reports, the balance sheet and the income statement, to show them to company outsiders, including the financial institutions from which the company borrows money and the company’s investors.</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\">The <a href=\"https://www.dummies.com/business/accounting/how-to-read-a-business-balance-sheet/\" target=\"_blank\" rel=\"noopener\"><b>balance sheet</b></a> is a snapshot of your business’s financial health as of a particular date. The balance sheet should show that your company’s assets are equal to the value of your liabilities and your equity. It uses the formula Assets = Liabilities + Equity.</p>\n</li>\n<li>\n<p class=\"first-para\">The <a href=\"https://www.dummies.com/business/accounting/how-to-read-an-income-statement/\" target=\"_blank\" rel=\"noopener\"><b>income statement</b></a> summarizes your company’s financial transactions for a particular time period, such as a month, quarter, or year. It starts with your revenues and then subtracts the costs of goods sold and any expenses incurred in operating the business. The bottom line of the income statement shows how much profit (or loss) the company made during the accounting period.</p>\n</li>\n</ul>\n"},{"title":"4 types of business structures","thumb":null,"image":null,"content":"<p>The four different types of business structures often involve different kinds and levels of accounting that the bookkeeper must be aware of and capable of performing.</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\"><b>Sole proprietorship:</b> Most new businesses with only one owner start out as sole proprietorships, and many never become anything else. To start a business as a sole proprietor, you don’t have to do anything official like file government papers or register with the IRS. Sole proprietorships aren’t taxable entities. Most sole proprietors add Schedule C — a “Profit or Loss from Business” form — to their personal tax returns.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Partnership:</b> The IRS automatically considers any business started by more than one person to be a partnership. Each person in the partnership is equally liable for the activities of the business. A partnership is the most flexible business structure for a business that involves more than one person. Partnerships aren’t taxable entities, but partners do have to file an informational IRS Form 1065 with their personal tax returns.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Limited Liability Company (LLC):</b> This business form falls somewhere between a corporation and a partnership or sole proprietorship in terms of protection by the law. In most states, LLC owners get legal protection from lawsuits like a corporation. Reporting requirements for LLCs aren’t as strict as they are for a corporation. LLCs don’t have to pay corporate taxes or file all the forms required of a corporation. The IRS treats LLCs as partnerships or sole proprietorships unless they specifically ask to be taxed as corporations.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>S or C corporation: </b>Corporations are separate legal entities, and their owners are protected from claims filed against the corporation’s activities. However, the obligations that come with incorporating are tremendous, and a corporation needs significant resources to pay for the required legal and accounting services. There are two types of corporate structures:</p>\n<ul class=\"level-two\">\n<li>\n<p class=\"first-para\"><b>S corporation: </b>This corporation has fewer than 100 shareholders and functions like a partnerships but gives owners additional legal protection.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>C corporation:</b> This corporation is a separate legal entity that files its own tax returns. It is treated in the courts more or less like a person. Owners must split their ownership by using shares of stock.</p>\n</li>\n</ul>\n</li>\n</ul>\n"}],"videoInfo":{"videoId":null,"name":null,"accountId":null,"playerId":null,"thumbnailUrl":null,"description":null,"uploadDate":null}},"sponsorship":{"sponsorshipPage":false,"backgroundImage":{"src":null,"width":0,"height":0},"brandingLine":"","brandingLink":"","brandingLogo":{"src":null,"width":0,"height":0}},"primaryLearningPath":"Advance","lifeExpectancy":"Five years","lifeExpectancySetFrom":"2022-02-25T00:00:00+00:00","dummiesForKids":"no","sponsoredContent":"no","adInfo":"","adPairKey":[]},"status":"publish","visibility":"public","articleId":207471},{"headers":{"creationTime":"2016-03-27T16:57:15+00:00","modifiedTime":"2022-02-25T16:04:45+00:00","timestamp":"2022-06-22T19:37:19+00:00"},"data":{"breadcrumbs":[{"name":"Business, Careers, & Money","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34224"},"slug":"business-careers-money","categoryId":34224},{"name":"Business","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34225"},"slug":"business","categoryId":34225},{"name":"Accounting","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34226"},"slug":"accounting","categoryId":34226},{"name":"General Accounting","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34230"},"slug":"general-accounting","categoryId":34230}],"title":"Understanding Business Accounting For Dummies Cheat Sheet","strippedTitle":"understanding business accounting for dummies cheat sheet","slug":"understanding-business-accounting-for-dummies-cheat-sheet","canonicalUrl":"","seo":{"metaDescription":"Make sense of your accounts, balance your budgets, and boost your profit margin with these tips for understanding business accounting.","noIndex":0,"noFollow":0},"content":"Want to get seriously savvy with your business accounting, but don’t know where to start? You don’t need to be a professional accountant to decode the jargon. Use these pointers to find out how to make sense of your accounts, balance your budgets, and boost your profit margin.","description":"Want to get seriously savvy with your business accounting, but don’t know where to start? You don’t need to be a professional accountant to decode the jargon. 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Tracy</b>, CPA, is professor of accounting, emeritus, at the University of Colorado in Boulder.</p>","authors":[{"authorId":9484,"name":"Colin Barrow","slug":"colin-barrow","description":" <b>Colin Barrow</b> is an international property investor and author of <i>Buying a Property in Eastern Europe For Dummies</i>.","_links":{"self":"https://dummies-api.dummies.com/v2/authors/9484"}},{"authorId":9472,"name":"John A. Tracy","slug":"john-a-tracy","description":"John A. Tracy, CPA, is professor of accounting, emeritus, at the University of Colorado in Boulder.","_links":{"self":"https://dummies-api.dummies.com/v2/authors/9472"}}],"_links":{"self":"https://dummies-api.dummies.com/v2/books/"}},"collections":[],"articleAds":{"footerAd":"<div class=\"du-ad-region row\" id=\"article_page_adhesion_ad\"><div class=\"du-ad-unit col-md-12\" data-slot-id=\"article_page_adhesion_ad\" data-refreshed=\"false\" \r\n data-target = \"[{&quot;key&quot;:&quot;cat&quot;,&quot;values&quot;:[&quot;business-careers-money&quot;,&quot;business&quot;,&quot;accounting&quot;,&quot;general-accounting&quot;]},{&quot;key&quot;:&quot;isbn&quot;,&quot;values&quot;:[&quot;9781119413530&quot;]}]\" id=\"du-slot-62b36f6f903c6\"></div></div>","rightAd":"<div class=\"du-ad-region row\" id=\"article_page_right_ad\"><div class=\"du-ad-unit col-md-12\" data-slot-id=\"article_page_right_ad\" data-refreshed=\"false\" \r\n data-target = \"[{&quot;key&quot;:&quot;cat&quot;,&quot;values&quot;:[&quot;business-careers-money&quot;,&quot;business&quot;,&quot;accounting&quot;,&quot;general-accounting&quot;]},{&quot;key&quot;:&quot;isbn&quot;,&quot;values&quot;:[&quot;9781119413530&quot;]}]\" id=\"du-slot-62b36f6f90adf\"></div></div>"},"articleType":{"articleType":"Cheat Sheet","articleList":[{"articleId":193904,"title":"Six Groups That Do Business with a Business","slug":"six-groups-that-do-business-with-a-business","categoryList":[],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/193904"}},{"articleId":193883,"title":"Main Tasks of Business Accounting","slug":"main-tasks-of-business-accounting-2","categoryList":[],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/193883"}},{"articleId":193902,"title":"Primary Financial Statements of a Business","slug":"primary-financial-statements-of-a-business-2","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/193902"}},{"articleId":193879,"title":"Understanding Accounting Values on the Balance Sheet","slug":"understanding-accounting-values-on-the-balance-sheet","categoryList":[],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/193879"}},{"articleId":193884,"title":"The Basic Steps of the Business Accounting Cycle","slug":"the-basic-steps-of-the-business-accounting-cycle","categoryList":[],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/193884"}}],"content":[{"title":"Six groups that do business with a business","thumb":null,"image":null,"content":"<p>Six main groups are intimately connected to the life of a business. Knowing who they are, what they expect and how you’re interacting with each of them is essential.</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\"><b>Customers,</b> who buy the products and services that the business sells.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Employees,</b> who provide services to the business; they are paid wages and salaries and are provided with a broad range of benefits such as a pension plan and paid holidays.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Suppliers</b> and <b>vendors,</b> who sell a wide range of things to the business such as legal advice, electricity and gas, telephone service, computers, vehicles, tools and equipment, furniture and even audits.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Debt sources of capital,</b> who loan money to the business, charge interest on the amount loaned and have to be repaid at specific dates in the future.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Equity sources of capital,</b> the individuals and financial institutions including private equity firms who invest money in the business and expect the business to earn profit on the capital they have invested.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Government</b> agencies that collect income taxes, payroll taxes, value-added tax and excise duties from the business, or who provide support and grants to encourage business expansion and international trade.</p>\n</li>\n</ul>\n"},{"title":"Main tasks of business accounting","thumb":null,"image":null,"content":"<p>As someone concerned with business accounting, you have a lot to know and to remember. To help you, this list explains the main tasks and processes.</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\"><b>Payroll:</b> Based on several collections of data: detailed private information in personnel files and earnings-to-date information, the correct amounts of income tax and social security tax. Several other deductions from wages also have to be calculated. NI contributions, PAYE payments, retirement and holiday pay have to be updated every pay period.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Cash inflows:</b> All cash received from sales and all other sources has to be carefully identified and recorded, not only in the cash account but also in the appropriate account for the source of the received cash.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Cash payments:</b> In addition to payroll checks, a business writes many other checks during the course of a year to pay for a wide variety of items including local business taxes, paying off loans and the distribution of some of its profit to the business owners.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Purchases and stock:</b> Accounting departments are usually responsible for keeping track of all purchase orders that have been placed for stock (products to be sold by the business) and all other assets and services that the business buys. The accounting department also keeps detailed records on all products held for sale by the business and, when the products are sold, records the cost of the goods sold.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Capital accounting:</b> A typical business holds many different assets called <i>capital</i>,<i> </i>including office furniture and equipment, retail display cabinets, computers, machinery and tools, vehicles, buildings and land. Apart from relatively small-cost items, a business has to maintain detailed records of its capital items, both for controlling the use of the assets and for determining taxes.</p>\n</li>\n</ul>\n"},{"title":"Primary financial statements of a business","thumb":null,"image":null,"content":"<p>This list gives details of the three primary financial statements in the running of a business. These statements record your business’s performance, letting you analyze and identify where you’re strong and not-so-strong in your finances:</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\"><b>Balance sheet:</b> A summary of the business’s financial position at the end of the accounting period.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Profit and loss account:</b> A summary of sales revenue and expenses that determines the profit (or loss) for the period that has just ended. The profit and loss account also summarizes the outflow of assets for expenses during the period leading down to the well-known <i>bottom line</i>, or final profit, or loss, for the period.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Cash flow statement:</b> The cash flow statement summarizes the business’s cash inflows and outflows during the period. The first part of this statement calculates the net increase or decrease in cash during the period from the profit-making activities that are reported in the profit and loss account.</p>\n</li>\n</ul>\n"},{"title":"Understanding accounting values on the balance sheet","thumb":null,"image":null,"content":"<p>Your balance sheet is one of three primary financial statements in the running of a business. It gives an overview of the business’s total assets and liabilities at a particular date, and is an important statement of your financial affairs. So understanding what it means it crucial. This list breaks down each of the values you’re likely to encounter:</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\"><b>Cash:</b> Amounts of money on hand in coin and currency; money on deposit in bank accounts</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Debtors:</b> Amounts not yet collected from credit sales to customers</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Stock:</b> Amounts of purchase costs or production costs for products that haven’t sold yet</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Fixed assets (or Property, Plant, and Equipment):</b> Amounts of costs invested in long-life, tangible, productive operating assets</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Creditors</b> <b>and</b> <b>accrued liabilities:</b> Amounts for the costs of unpaid expenses</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Overdrafts and loans:</b> Amounts borrowed on interest-bearing liabilities</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Capital stock:</b> Amounts of capital invested in the business by owners (shareholders). This can be either by way of the initial capital introduced by them or through profits left in the business after trading gets under way</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Retained earnings (or reserves):</b> Amounts remaining in the owners’ equity account</p>\n</li>\n</ul>\n"},{"title":"The basic steps of the business accounting cycle","thumb":null,"image":null,"content":"<p>This flowchart gives an overview of the business accounting cycle, mapping the entire bookkeeping process with aspects of the accounting system side-by-side. The bookkeeping stages are on the left-hand side and the respective accounting processes are on the right.</p>\n<p><img loading=\"lazy\" src=\"https://www.dummies.com/wp-content/uploads/174527.image0.jpg\" alt=\"image0.jpg\" width=\"540\" height=\"640\" /></p>\n"}],"videoInfo":{"videoId":null,"name":null,"accountId":null,"playerId":null,"thumbnailUrl":null,"description":null,"uploadDate":null}},"sponsorship":{"sponsorshipPage":false,"backgroundImage":{"src":null,"width":0,"height":0},"brandingLine":"","brandingLink":"","brandingLogo":{"src":null,"width":0,"height":0}},"primaryLearningPath":"Advance","lifeExpectancy":"One year","lifeExpectancySetFrom":"2022-02-25T00:00:00+00:00","dummiesForKids":"no","sponsoredContent":"no","adInfo":"","adPairKey":[]},"status":"publish","visibility":"public","articleId":209225},{"headers":{"creationTime":"2016-03-27T16:48:23+00:00","modifiedTime":"2022-02-24T21:45:02+00:00","timestamp":"2022-06-22T19:37:18+00:00"},"data":{"breadcrumbs":[{"name":"Business, Careers, & Money","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34224"},"slug":"business-careers-money","categoryId":34224},{"name":"Business","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34225"},"slug":"business","categoryId":34225},{"name":"Accounting","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34226"},"slug":"accounting","categoryId":34226},{"name":"General Accounting","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34230"},"slug":"general-accounting","categoryId":34230}],"title":"Accounting All-In-One For Dummies Cheat Sheet","strippedTitle":"accounting all-in-one for dummies cheat sheet","slug":"accounting-all-in-one-for-dummies-cheat-sheet","canonicalUrl":"","seo":{"metaDescription":"Refer to this handy accounting Cheat Sheet for the basics of cash flow and profit, cost-accounting formulas, and financial statement fraud.","noIndex":0,"noFollow":0},"content":"The accounting field covers a lot of ground, from setting up accounts and producing financial reports to budgeting for a business and preventing and detecting fraud.\r\n\r\nQuickly get up to speed on the basics with tips for controlling cash in a business, an overview of cash flow and profit, quick access to essential cost-accounting formulas, and the red flags of financial statement fraud.","description":"The accounting field covers a lot of ground, from setting up accounts and producing financial reports to budgeting for a business and preventing and detecting fraud.\r\n\r\nQuickly get up to speed on the basics with tips for controlling cash in a business, an overview of cash flow and profit, quick access to essential cost-accounting formulas, and the red flags of financial statement fraud.","blurb":"","authors":[{"authorId":8993,"name":"Joseph Kraynak","slug":"joseph-kraynak","description":" <p><B>Ralph R. Roberts</b> has been investing in foreclosed properties for over 30 years. He knows every step of the process, from scouting properties to cashing out after the sale, from helping distressed homeowners keep their homes to buying those homes when the owners can no longer afford them. He also has assisted homeowners who have been taken advantage of by unscrupulous investors.</p> ","_links":{"self":"https://dummies-api.dummies.com/v2/authors/8993"}}],"primaryCategoryTaxonomy":{"categoryId":34230,"title":"General Accounting","slug":"general-accounting","_links":{"self":"https://dummies-api.dummies.com/v2/categories/34230"}},"secondaryCategoryTaxonomy":{"categoryId":0,"title":null,"slug":null,"_links":null},"tertiaryCategoryTaxonomy":{"categoryId":0,"title":null,"slug":null,"_links":null},"trendingArticles":null,"inThisArticle":[],"relatedArticles":{"fromBook":[],"fromCategory":[{"articleId":277438,"title":"Financial Accounting: The Effect of Business Transactions","slug":"financial-accounting-the-effect-of-business-transactions","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/277438"}},{"articleId":277429,"title":"What Are Accounting Journals?","slug":"what-are-accounting-journals","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/277429"}},{"articleId":277423,"title":"How to Read Corporate Annual Reports","slug":"how-to-read-corporate-annual-reports","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/277423"}},{"articleId":277418,"title":"Showing the Money: The Statement of Cash Flows","slug":"showing-the-money-the-statement-of-cash-flows","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/277418"}},{"articleId":277410,"title":"10 Accounting Career Opportunities","slug":"10-accounting-career-opportunities","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/277410"}}]},"hasRelatedBookFromSearch":false,"relatedBook":{"bookId":281920,"slug":"accounting-all-in-one-for-dummies-with-online-practice-2nd-edition","isbn":"9781119453895","categoryList":["business-careers-money","business","accounting","general-accounting"],"amazon":{"default":"https://www.amazon.com/gp/product/1119453895/ref=as_li_tl?ie=UTF8&tag=wiley01-20","ca":"https://www.amazon.ca/gp/product/1119453895/ref=as_li_tl?ie=UTF8&tag=wiley01-20","indigo_ca":"http://www.tkqlhce.com/click-9208661-13710633?url=https://www.chapters.indigo.ca/en-ca/books/product/1119453895-item.html&cjsku=978111945484","gb":"https://www.amazon.co.uk/gp/product/1119453895/ref=as_li_tl?ie=UTF8&tag=wiley01-20","de":"https://www.amazon.de/gp/product/1119453895/ref=as_li_tl?ie=UTF8&tag=wiley01-20"},"image":{"src":"https://www.dummies.com/wp-content/uploads/accounting-all-in-one-for-dummies-2nd-edition-cover-9781119453895-203x255.jpg","width":203,"height":255},"title":"Accounting All-in-One For Dummies with Online Practice","testBankPinActivationLink":"","bookOutOfPrint":false,"authorsInfo":"<p><b data-author-id=\"34810\">Kenneth W. Boyd</b> has 30 years of experience in accounting and financial services. He is a four-time Dummies book author, a blogger, and a video host on accounting and finance topics. </p>","authors":[{"authorId":34810,"name":"Kenneth W. Boyd","slug":"kenneth-w.-boyd","description":" <p><b>Kenneth W. Boyd</b> has 30 years of experience in accounting and financial services. He is a four&#45;time Dummies book author, a blogger, and a video host on accounting and finance topics. ","_links":{"self":"https://dummies-api.dummies.com/v2/authors/34810"}}],"_links":{"self":"https://dummies-api.dummies.com/v2/books/"}},"collections":[],"articleAds":{"footerAd":"<div class=\"du-ad-region row\" id=\"article_page_adhesion_ad\"><div class=\"du-ad-unit col-md-12\" data-slot-id=\"article_page_adhesion_ad\" data-refreshed=\"false\" \r\n data-target = \"[{&quot;key&quot;:&quot;cat&quot;,&quot;values&quot;:[&quot;business-careers-money&quot;,&quot;business&quot;,&quot;accounting&quot;,&quot;general-accounting&quot;]},{&quot;key&quot;:&quot;isbn&quot;,&quot;values&quot;:[&quot;9781119453895&quot;]}]\" id=\"du-slot-62b36f6e94698\"></div></div>","rightAd":"<div class=\"du-ad-region row\" id=\"article_page_right_ad\"><div class=\"du-ad-unit col-md-12\" data-slot-id=\"article_page_right_ad\" data-refreshed=\"false\" \r\n data-target = \"[{&quot;key&quot;:&quot;cat&quot;,&quot;values&quot;:[&quot;business-careers-money&quot;,&quot;business&quot;,&quot;accounting&quot;,&quot;general-accounting&quot;]},{&quot;key&quot;:&quot;isbn&quot;,&quot;values&quot;:[&quot;9781119453895&quot;]}]\" id=\"du-slot-62b36f6e94df2\"></div></div>"},"articleType":{"articleType":"Cheat Sheet","articleList":[{"articleId":156779,"title":"4 Tips for Controlling Your Business Cash","slug":"4-tips-for-controlling-your-business-cash","categoryList":[],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/156779"}},{"articleId":156778,"title":"The Relationship between Cash Flow and Profit in Business","slug":"the-relationship-between-cash-flow-and-profit-in-business","categoryList":["business-careers-money","business","accounting","general-accounting"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/156778"}},{"articleId":156776,"title":"9 Must-Know Formulas for Cost Accounting","slug":"9-must-know-formulas-for-cost-accounting","categoryList":[],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/156776"}},{"articleId":156777,"title":"13 Ways to Spot Fraud in Business Financial Statements","slug":"13-ways-to-spot-fraud-in-business-financial-statements","categoryList":["business-careers-money","business","accounting","audits"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/156777"}}],"content":[{"title":"4 tips for controlling your business cash","thumb":null,"image":null,"content":"<p>Although bookkeepers typically are the ones who record what happens to your business&#8217;s cash, they aren&#8217;t the only ones who control where that cash goes. Controlling your company&#8217;s money is important: A business&#8217;s cash can be a tempting siren for employees who aren&#8217;t accountable to the right checks and balances.</p>\n<p>Safeguard your company&#8217;s money by following these suggestions to limit any one person&#8217;s access to cash:</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\"><b>Separate cash handlers from recordkeeping. </b>Be sure that the person who accepts cash isn&#8217;t also recording the transaction.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Separate authorization responsibilities from cash handlers. </b>Be sure that the person who authorizes a payment isn&#8217;t also signing the check or dispersing the cash.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Segregate the duties of your bookkeeping staff to ensure a good system of checks and balances.</b> Don&#8217;t put too much trust in one person — unless that one person is you.</p>\n</li>\n<li>\n<p class=\"first-para\"><b>Separate operational responsibility (actual day-to-day transactions) from record-keeping responsibility (entering transactions in the books).</b></p>\n</li>\n</ul>\n"},{"title":"The relationship between cash flow and profit","thumb":null,"image":null,"content":"<p>Making profit generates cash flow. Any business owner knows that. But the actual increase in cash during a given period is invariably lower or higher than the profit number. The following points illustrate how cash flow relates to profit:</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\">The amounts of cash flows during the period rarely are equal to the revenue and expense numbers in the P&amp;L (profit and loss) report for the period.</p>\n</li>\n<li>\n<p class=\"first-para\">Actions that <i>lower</i> cash flow: increasing accounts receivable and inventory; decreasing accounts payable and accrued expenses payable.</p>\n</li>\n<li>\n<p class=\"first-para\">Actions that <i>raise</i> cash flow: decreasing accounts receivable and inventory; increasing accounts payable and accrued expenses payable.</p>\n</li>\n<li>\n<p class=\"first-para\">Depreciation expense is not a cash outlay in the period recorded; neither is amortization expense; unusual losses recorded in the period may not involve cash outlay but rather be write-downs of assets or write-ups of liabilities.</p>\n</li>\n</ul>\n"},{"title":"9 must-know formulas for cost accounting","thumb":null,"image":null,"content":"<p>To reduce and eliminate costs in a business, you need to know the formulas that are most often used in cost accounting. When you understand and use these foundational formulas, you&#8217;ll be able to analyze a product&#8217;s price and increase profits.</p>\n<p><b>Breakeven</b><b> </b><b>Formula</b><b>:</b></p>\n<blockquote><p><i>Profit ($0) = Sales – Variable costs – Fixed costs</i></p></blockquote>\n<p><b>Target Net Income</b><b>:</b></p>\n<blockquote><p><i>Target net income = Sales – Variable costs – Fixed costs</i></p></blockquote>\n<p><b>Gross Margin</b><b>:</b></p>\n<blockquote><p><i>Gross margin = Sale price – Cost of sales (material and labor)</i></p></blockquote>\n<p><b>Contribution Margin</b><b>:</b></p>\n<blockquote><p><i>Contribution margin = Sales – Variable costs</i></p></blockquote>\n<p><b>Pre-Tax Dollars Needed for Purchase</b><b>:</b></p>\n<blockquote><p><i>Pre-tax dollars needed for purchase = Cost of item ÷ (1 – Tax rate)</i></p></blockquote>\n<p><b>Price Variance</b><b>:</b></p>\n<blockquote><p><i>Price variance = (Actual price – Budgeted price) × (Actual units sold)</i></p></blockquote>\n<p><b>Efficiency Variance</b><b>:</b></p>\n<blockquote><p><i>Efficiency variance = (Actual quantity – Budgeted quantity) × (Standard price or rate)</i></p></blockquote>\n<p><b>Variable Overhead Variance</b><b>:</b></p>\n<blockquote><p><i>Variable overhead variance = Spending variance + Efficiency variance</i></p></blockquote>\n<p><b>Ending Inventory</b><b>:</b></p>\n<blockquote><p><i>Ending inventory = Beginning inventory + Purchases – Cost of sales</i></p></blockquote>\n"},{"title":"13 ways to spot fraud in business financial statements","thumb":null,"image":null,"content":"<p>Financial statement fraud, commonly referred to as &#8220;cooking the books,&#8221; involves deliberately overstating assets, revenues, and profits and/or understating liabilities, expenses, and losses. When a forensic accountant investigates business financial fraud, she looks for red flags or accounting warning signs that indicate suspect business accounting practices.</p>\n<p>These red flags include the following:</p>\n<ul class=\"level-one\">\n<li>\n<p class=\"first-para\">Aggressive revenue recognition practices, such as recognizing revenue in earlier periods than when the product was sold or the service was delivered</p>\n</li>\n<li>\n<p class=\"first-para\">Unusually high revenues and low expenses at period end that can&#8217;t be attributed to seasonality</p>\n</li>\n<li>\n<p class=\"first-para\">Growth in inventory that doesn&#8217;t match growth in sales</p>\n</li>\n<li>\n<p class=\"first-para\">Improper capitalization of expenses in excess of industry norms</p>\n</li>\n<li>\n<p class=\"first-para\">Reported earnings that are positive and growing but operating cash flow that&#8217;s declining</p>\n</li>\n<li>\n<p class=\"first-para\">Growth in revenues that&#8217;s far greater than growth in other companies in the same industry or peer group</p>\n</li>\n<li>\n<p class=\"first-para\">Gross margin or operating margins out of line with peer companies</p>\n</li>\n<li>\n<p class=\"first-para\">Extensive use of off–balance sheet entities based on relationships that aren&#8217;t normal in the industry</p>\n</li>\n<li>\n<p class=\"first-para\">Sudden increases in gross margin or cash flow as compared with the company&#8217;s prior performance and with industry averages</p>\n</li>\n<li>\n<p class=\"first-para\">Unusual increases in the book value of assets, such as inventory and receivables</p>\n</li>\n<li>\n<p class=\"first-para\">Disclosure notes so complex that it&#8217;s impossible to determine the actual nature of a particular transaction</p>\n</li>\n<li>\n<p class=\"first-para\">Invoices that go unrecorded in the company&#8217;s financial books</p>\n</li>\n<li>\n<p class=\"first-para\">Loans to executives or other related parties that are written off</p>\n</li>\n</ul>\n<p class=\"Warning\">A business that engages in such fraudulent practices stands to lose a tremendous amount of money when penalties and fines, legal costs, the loss of investor confidence, and a tarnished reputation are taken into account.</p>\n"}],"videoInfo":{"videoId":null,"name":null,"accountId":null,"playerId":null,"thumbnailUrl":null,"description":null,"uploadDate":null}},"sponsorship":{"sponsorshipPage":false,"backgroundImage":{"src":null,"width":0,"height":0},"brandingLine":"","brandingLink":"","brandingLogo":{"src":null,"width":0,"height":0}},"primaryLearningPath":"Advance","lifeExpectancy":"Two 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1,139 results
Bookkeeping Bookkeeping For Dummies Cheat Sheet (Australia/New Zealand Edition)

Cheat Sheet / Updated 04-07-2022

A great bookkeeper cares that the financial statements make sense and gets upset when something doesn’t balance or stuff goes missing. They also feel responsible when it comes to getting customers to pay on time. A good bookkeeper, in other words, is worth their weight in gold. This Cheat Sheet summarizes what you need to know to be an excellent bookkeeper.

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General Accounting Accounting For Canadians For Dummies Cheat Sheet

Cheat Sheet / Updated 03-25-2022

Every business and not-for-profit entity needs a reliable accounting system to facilitate day-to-day operations and to prepare financial statements, tax returns, and internal reports to managers. The Accounting For Canadians For Dummies Cheat Sheet provides a quick and easy introduction into the key functions and responsibilities of the accounting department in any organization.

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Calculation & Analysis Finite Math For Dummies Cheat Sheet

Cheat Sheet / Updated 03-08-2022

When performing the many types of computations found in Finite Math topics, it’s helpful to have some numbers, notations, distributions, and listings right at hand.

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Bookkeeping Nonprofit Bookkeeping & Accounting For Dummies Cheat Sheet

Cheat Sheet / Updated 03-03-2022

To stay organized and on top of your nonprofit’s bookkeeping and accounting responsibilities, complete tasks that need to be done daily, weekly, quarterly, and yearly. Keep necessary financial information up-to-date so you’re prepared to submit paperwork to the government and to the people involved in your nonprofit organization who plan your budget.

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General Accounting Accounting Workbook For Dummies Cheat Sheet

Cheat Sheet / Updated 02-28-2022

As a business manager, taking care of your company’s accounting needs is top priority. Correctly preparing a financial statement involves knowing all the information that needs to appear on the statement. Making a profit keeps you in business, so follow the financial statements closely, make adjustments if needed, and follow some basic rules for presenting accounting information to your business’s managers.

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General Accounting 1,001 Accounting Practice Problems For Dummies Cheat Sheet

Cheat Sheet / Updated 02-28-2022

Accounting, as you may guess, involves a lot of math. As you practice various types of accounting problems, and when you begin doing accounting work for real, you will need to utilize various formulas to calculate the information you need.

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Bookkeeping Bookkeeping for Canadians For Dummies Cheat Sheet

Cheat Sheet / Updated 02-25-2022

Bookkeepers take care of all the financial data for businesses. Accurate and complete financial bookkeeping is crucial to any business’s decision makers: owner, outside investors, creditors, bank and even its employees. Keeping a close eye on your day-to-day business operations can help you be a Canadian small-business success story.

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Bookkeeping Bookkeeping All-in-One For Dummies Cheat Sheet

Cheat Sheet / Updated 02-25-2022

The title of bookkeeper brings up mental images of a quiet, shy individual who spends countless hours poring over columns of numbers. In reality, the job of a bookkeeper is of vital importance to any business that needs to account for its assets, liabilities, and equity. From the company founders to the investors to the IRS, the bookkeeper must be able to report the financial status by way of balance sheets and income statements and keep an organized and detailed paper trail of every financial transaction. This Cheat Sheet also describes the types of business structures with which bookkeepers must be familiar: sole proprietorships, partnerships, and limited liability companies.

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General Accounting Understanding Business Accounting For Dummies Cheat Sheet

Cheat Sheet / Updated 02-25-2022

Want to get seriously savvy with your business accounting, but don’t know where to start? You don’t need to be a professional accountant to decode the jargon. Use these pointers to find out how to make sense of your accounts, balance your budgets, and boost your profit margin.

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General Accounting Accounting All-In-One For Dummies Cheat Sheet

Cheat Sheet / Updated 02-24-2022

The accounting field covers a lot of ground, from setting up accounts and producing financial reports to budgeting for a business and preventing and detecting fraud. Quickly get up to speed on the basics with tips for controlling cash in a business, an overview of cash flow and profit, quick access to essential cost-accounting formulas, and the red flags of financial statement fraud.

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