The Everything Accounting Book: Balance Your Budget, Manage Your Cash Flow, And Keep Your Books in the Black

by Michele Cagan CPA

Overview

If you're a home-based or small business owner, you need to learn how to balance your books as you start and grow your business. The Everything Accounting Book is a great beginner's guide for the basics of accounting.

This easy-to-use reference is loaded with expert tips and advice on:

• The differences between accounting and bookkeeping
• Preparing financial statements
• Recording and recognizing revenues and expenses
• Tax planning strategies

Real-world examples show accounting procedures for a retail business, a manufacturer, a home-based business, and a small high-tech company. So no matter what your business, you have the information you need to make a go of it with The Everything Accounting Book!

Product Details

ISBN-13:	9781605502946
Publisher:	Adams Media
Publication date:	12/11/2006
Series:	Everything® Series
Sold by:	SIMON & SCHUSTER
Format:	eBook
Pages:	304
File size:	437 KB

About the Author

Michele Cagan is a CPA, author, and financial mentor. With more than twenty years of experience, she offers unique insights into personal finances, from breaking out of debt and minimizing taxes to maximizing income and building wealth. Michele has written numerous articles and books about small business finances, investing, and accounting, including The Infographic Guide to Personal Finance; Real Estate Investing 101; Investing 101; Budgeting 101; Stock Market 101, 2nd Edition; and The Financial Recovery Workbook. In addition to her financial know-how, Michele has a not-so-secret love of painting, Star Wars, and chocolate. She lives in Maryland with her kid, dogs, cats, and koi. Get more financial guidance from Michele by visiting MicheleCaganCPA.com.

Table of Contents

Top Ten Accounting Mistakes     x
Introduction     xi
Accounting Is More Titan Numbers     1
Tracking and Measuring Success     2
Accounting Versus Bookkeeping     2
Who Uses Accounting Information?     4
Different Versions for Different Reasons     5
Who's Who in Accounting     7
How Accountants Can Help You     8
Pick the Right Accounting Professional     11
The Basic Accounts     13
Accounting Starts with Accounts     14
Understanding Assets     15
A Look at Liabilities     16
All about Equity     17
Revenues, Costs, and Expenses     18
How the Accounts Connect     20
Debits and Credits     22
Keeping Track of Transactions     25
What Counts as a Transaction     26
When to Record Transactions     26
Setting Up Your Accounts     29
Meet the General Ledger     33
The Daily Journals     34
It's All in the Posting     39
Checking It Twice     41
The Accounting Cycle     43
Setting Up a System     45
Get (and Stay)Organized     46
Software Makes It Simpler     49
Mapping Out Your Accounting Processes     50
The Everyday Transactions     55
Reconciling Your Accounts     56
What to Keep, What to Toss     59
The Accounting Equation     63
Every Business Has Assets     64
Breaking Out Asset Categories     64
A Closer Look at Fixed Assets     68
Liabilities Are What Your Company Owes     72
Equity Means Ownership     74
Assets Equal Liabilities Plus Equity     75
Recording Your Revenues     77
What Are You Selling?     78
The Basics of Sales Transactions     79
Develop a Sales Journal     82
Simple Cash Sales     83
Selling on Account     84
Collecting Sales Tax     86
Dealing with Special Sales Transactions     87
When a Sale Is Not a Sale     90
The Inventory-Cost Connection     91
Inventory Transforms into Cost of Goods     92
What Goes into Inventory Costs?     94
Set Up Your Purchases Journal     95
Four Ways to Value Inventory     96
Extra Steps for Manufacturers     99
Figure Out Cost of Goods Sold     100
Standard Operating Expenses     103
A Look at Expense Categories     104
What Goes into Selling Costs     104
Understanding Overhead     106
All about Depreciation     109
Don't Forget Amortization     111
Employees Cause a Lot of Transactions     112
Recording Expense Transactions     113
Managing the Payroll     115
A Big Pile of Forms     116
All about Payroll Taxes     119
Employee Benefits and Bonuses     121
Calculating Take-Home Pay     122
Payroll Tax Reporting and Filing     127
Never Mess Around with Payroll Taxes     129
Still Want to Do It Yourself?     130
Always Know Your Cash     131
The Importance of Having Cash     132
Earning Profits but Out of Cash     132
The Basics of Cash Flow     133
Tracking Your Incoming Cash     135
Recording Your Outgoing Cash     136
Reconcile Your Bank Statement     137
What to Do When Cash Runs Low     139
Handling Customer Credit     141
Why Sell on Credit?     142
Establish Your Credit Policies     144
Don't Give Credit to Just Anyone     146
Creating Invoices and Account Statements     148
Dealing with Collections     150
Accounting for Accounts Receivable Transactions     152
Controlling Purchase Costs     153
Know What You Want Before You Buy     154
Choose Your Vendors Wisely     155
Getting Vendors to Extend Credit     157
Creating Purchase Orders     159
Dealing with Purchase Problems     160
Review Their Invoices     161
Recording Accounts Payable Transactions     161
The End of Period Cleanup     163
Accounting Periods     164
The Working Trial Balance     166
Making Adjusting Entries     167
Accounting for Accruals     170
Prelude to Financial Statements     173
Closing the Books     174
Preparing Financial Statements     177
Three Major Financial Statements     178
How These Statements Interconnect     178
The Statement of Profit and Loss     179
The Balance Sheet     184
The Statement of Cash Flows      188
Different Entities Mean Different Equity     191
Meet the Business Entities     192
Which One Is Best for Your Business?     192
Accounting for Sole Proprietorships     194
Accounting for Partnership Equity     195
Distributing Partnership Profits and Losses     196
The Corporate Equity Section     198
Dealing with Dividends     201
The Income Tax Impact     203
Financial Statements Flow into Tax Returns     204
Different Income Taxation for Different Entities     204
Introducing Business Tax Forms     205
Different Ways to Pay Yourself     208
Your Payment Strategy Impacts Your Personal Taxes     210
Tax Planning Strategies     213
The Best Use of Your Financial Statements     215
What Can Your Statements Tell You?     216
Vertical and Horizontal Analysis     217
Calculating Crucial Financial Ratios     221
Nipping Problems in the Bud     226
A Basis for Decision-Making     228
Boosting Profitability and Positive Cash Flow     228
When You Need Outside Funding     230
More Ways Accounting Helps Your Business      231
Know Your Costs to Set Your Prices     232
The Break-Even Analysis     233
Developing Pro Forma Statements     235
Sticking to a Budget     236
Financing Major Purchases     237
Management Accounting     238
The Importance of Internal Controls     239
Using Internal Audits to Your Advantage     242
Unique Issues for Specific Businesses     243
Common and Not-So-Common Transactions     244
Retail Is More Than Buying and Selling     244
Manufacturers Produce Special Transactions     245
Accounting for Your Home-Based Business     247
Small High-Tech Companies     250
Building Construction Transactions     251
Retirement Plans     255
The Best Tax Shelter     256
Individual Retirement Accounts (IRAs)     258
Simple Plans     260
Simplified Employee Pensions (SEPs)     262
Keogh Plans     264
Choosing the Right Plan for You     265
Accounting for Contributions     266
Common Small-Business Tax Snafus     269
Don't Be Afraid of the IRS     270
Employees Versus Contractors      271
Salaries, Dividends, or Loans?     273
Tracking Travel Expenses     277
About Fringe Benefits     279
Keeping Things Separate     280
Glossary     281
Small-Business Resources on the Internet     284
Index     286