Business People Club

accounting

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Starting a Business Accounting

Starting a business can be quite trying at times. There are many things you must consider when starting a business. In addition to deciding what type of business you will start up, what the business will sell or what services the business will provide, you must also make sure that your business is ... on your risk of running a business as well as cutting out the possibility that your business could be shut down before it has ever truly begun.

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by CharmingChamp
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Knowing When to Hire a Bookkeeper

Do you love the thought of handling the financial books for your business? For most of us, unless you do bookkeeping for a living, the answer to that question is probably no. How much time does it take you on either a daily or weekly basis to handle this task? If you are finding it is taking too ... wisdom, and if/when the time is right and your budget will allow, hire someone to take off the pressure. Your peace of mind will be well worth it.

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by LoyalChief
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What Is Accounting Anyway?

Anyone who's worked in an office at some point or another has had to go to accounting. They're the people who pay and send out the bills that keep the business running. They do a lot more than that, though. Sometimes referred to as "bean counters" they also keep their eye ... devastating. Accounting is basically information, and this information is published periodically in business as a profit and loss statement, or an income statement.

by Octopixy
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Basic Accounting Principles

Accounting has been defined as, by Professor of Accounting at the University of Michigan William A Paton as having one basic function: "facilitating the administration of economic activity. This function has two closely related phases: 1) measuring and arraying economic data; and 2) communicating the results ... is a system for doing this; not every company or individual can devise their own systems for accounting; the result would be chaos!

by HairyMagpie
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Accounting Principles

If everyone involved in the process of accounting followed their own system, or no system at all, there's be no way to truly tell whether a company was profitable or not. Most companies follow what are called generally accepted accounting principles, or GAAP, and there are huge tomes in libraries and ... . The results of these practices can be devastating and ruin hundreds and thousands of lives, as in the cases of Enron, Rite Aid and others.

by ShowDolphin
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Bookkeeping

So what goes on the accounting and bookkeeping departments? What do these people do on a daily basis? Well, one thing they do that's terribly important to everyone working there is Payroll. All the salaries and taxes earned and paid by every employee every pay period have to be recorded. ... such as a business's property and equipment. This can include the office building, furniture, computers, even the smallest items such as pencils and pens.

by GrizzlyFlash
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Profit and Loss

It might seem like a no-brainer to define just exactly what profit and loss are. But of course these have definitions like everything else. Profit can be called different things, for a start. It's sometimes called net income or net earnings. Businesses that sell products and services generate ... Economic trends and consumer behaviors change and it's not always possible to predict these and what income they'll have on a company's performance.

by VoyageHooper
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Bookkeeping Basics

Most people probably think of bookkeeping and accounting as the same thing, but bookkeeping is really one function of accounting, while accounting encompasses many functions involved in managing the financial affairs of a business. Accountants prepare reports based, in part, on the work of bookkeepers. ... step is for the bookkeeper to close the books, which means bringing all the bookkeeping for a fiscal year to a close and summarized.

by BeautifulWolf
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Personal Accounting

If you have a checking account, of course you balance it periodically to account for any differences between what's in your statement and what you wrote down for checks and deposits. Many people do it once a month when their statement is mailed to them, but with the advent of online banking, ... and property taxes. Taxable income - This is the balance of income that's subject to taxes after personal exemptions and deductions are factored in.

by FrighteningTwinkles
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Making a Profit

Accountants are responsible for preparing three primary types of financial statements for a business. The income statement reports the profit-making activities of the business and the bottom-line profit or loss for a specified period. The balance sheets reports the financial position of the business at ... involves several variable, not just increasing the amount of cash that flows through a company, but management of other assets as well.

by Wallaby
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Assets and Liabilities

Making a profit in a business is derived from several different areas. It can get a little complicated because just as in our personal lives, business is run on credit as well. Many businesses sell their products to their customers on credit. Accountants use an asset account called accounts ... deducted from the cash account, or added to the accounts payable liability account, depending on whether the business has paid with cash or credit.

by Falconjurer
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Gains and Losses

It would probably be ideal if business and life were as simple as producing goods, selling them and recording the profits. But there are often circumstances that disrupt the cycle, and it's part of the accountants job to report these as well. Changes in the business climate, ... financial reports. Generally Accepted Accounting Procedures (GAAP) require that businesses make any one-time losses or gains very visible in their income statement.

by Emufasa
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Balance sheet

A balance sheet is a quick picture of the financial condition of a business at a specific period in time. The activities of a business fall into two separate groups that are reported by an accountant. They are profit-making activities, which includes sales and expenses. This can also be referred to as operating ... at the end of each month, quarter and year. It's always prepared at the close of business on the last day of the profit period.

by Celestiger
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Revenue and receivables

In most businesses, what drives the balance sheet are sales and expenses. In other words, they cause the assets and liabilities in a business. One of the more complicated accounting items are the accounts receivable. As a hypothetical situation, imagine a business that offers all its customers a 30 ... to net income that difference between the receivables at the beginning of the reporting period and the receivables at the end of the same period.

by PositiveVoid
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Inventory and expenses

Inventory is usually the largest current asset of a business that sells products. If the inventory account is greater at the end of the period than at the start of the reporting period, the amount the business actually paid in cash for that inventory is more than what the business recorded ... isn't a realistic scenario for growth. In the real business world, you generally can't enjoy growth in revenue without incurring additional expenses.

by OpinionOwl
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Depreciation

Depreciation is a term we hear about frequently, but don't really understand. It's an essential component of accounting however. Depreciation is an expense that's recorded at the same time and in the same period as other accounts. Long-term operating assets that are not held for sale in the ... record the cost of using the assets during period. The higher the total cost of a business's fixed assets, then the higher its depreciation expense.

by TrustyKitty
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Depreciation reporting

In an accountant's reporting systems, depreciation of a business's fixed assets such as its buildings, equipment, computers, etc. is not recorded as a cash outlay. When an accountant measures profit on the accrual basis of accounting, he or she counts depreciation as an expense. Buildings, ... that it doesn't require cash outlay in the year being charged with the expense. That occurred when the business invested in those tangible assets.

by SleepyFledgling
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Investing and financing

Another portion of the statement of cash flows reports the investment that the company took during the reporting year. New investments are signs of growing or upgrading the production and distribution facilities and capacity of the business. Disposing of long-term assets or divesting itself of a major part ... long-term debt during a year are generally reported in the statement of cash flows. These are reported as gross figures, rather than net.

by GroundHurricane
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Building Cash Reserves

Building a financial cushion for your business is never easy. Experts say that businesses should have anywhere from six to nine months worth of income safely stored away in the bank. If you're a business grossing $250,000 per month, the mere thought of saving over $1.5 million dollars in a savings ... in sight, it's better to see it happening and put corrective measures into place, rather than discovering your losses five or six months too late.

by SwiftHeroine
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Managing the Bottom Line

If you don't keep track of how much money you're making, you have no idea whether your business is successful or not. You can't tell how well your marketing is working. And I don't just mean you should know the amount of your total sales or gross revenue. You need to know what your net profit ... each month if your expenses are almost as high, or higher. Many high-revenue businesses have gone under for this very reason -- don't be one of them.

by Sumogre
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What is the FASB?

The FASB is one organization that provides standardized guidelines for financial reporting. The mission of the Financial Accounting Standards Board (FASB) is to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, ... users of financial reports. It also will help the public to understand the nature and limitations of information supplied by financial reporting.

by Mosquiche
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What are auditors?

Accountants and auditors help to ensure that the Nation's firms are run efficiently, its public records kept accurately, and its taxes paid properly and on time. They perform these vital functions by offering an increasingly wide array of business and accounting services, ... Federal Government may work as Internal Revenue Service agents or in financial management, financial institution examination, or budget analysis and administration.

by Tabooccaneer
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What is forensic accounting?

Forensic accounting is the practice of utilizing accounting, auditing, and investigative skills to assist in legal matters. It encompasses 2 main areas - litigation support, investigation, and dispute resolution. Litigation support represents the factual presentation of economic issues related to existing ... . Why not consider becoming a forensic accountant on the Forensic Accounting Masters Degree link on the left-hand navigation bar.

by Sassassin
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Who uses forensic accountants?

Forensic accounting financial investigative specialists work with financial information for the purpose of conveying complicated issues in a manner that others can easily understand. While some forensic accountants and forensic accounting specialists are engaged in the public practice of forensic examination, others ... testify in court as an expert witness and assist in the preparation of visual aids and written summaries for use in court.

by GamerAlpaca
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Disclosure

Financial statements are the backbone of a complete financial report. In fact, a financial report is not complete if the three primary financial statements are not included. but a financial report is much more than just those statements. A financial report requires disclosures. ... of information for publicly held companies. --International businesses have to abide by disclosure standards adopted by the International Accounting Standards Board.

by MysteryWasp
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