Recent Articles


Those expenditures meeting the tests of ordinary and necessary given the nature of the business activity.

Bookkeeping – Various Terms (Lesson 26)


In the previous 25 lessons I covered a lot of different terms and this lesson is merely a summary of the various terms a bookkeeper encounters. (Lesson 1) Account types – There are six major sets of accounts; three (assets, liabilities, [...]

Bookkeeping – Other Expenses and Revenue (Lesson 19)


In accounting sometimes an extraordinary  event occurs.   When this happens the associated revenue and expense is recorded in the expense type of accounts.   There are two different methods used to record this transaction – gross or net.   [...]

Carpet Cleaning Service – Margins and Expenses


A very common small business in the service industry is the carpet cleaner.  Many owners of such businesses desire to know the margins and of course the associated operating expenses involved.  This article addresses these two questions and I’ll [...]

Hobbies – Business Perspective and Tax Compliance


Many people turn their hobbies into a business function.  Not so much to make a living or make big profits, but more to help offset the costs of the hobby.  Whenever you go to one of those community fairs, the vendors at the respective booths are [...]

Chart of Accounts – Layout


The goal of accounting is to record the economic activity of the business.  This is achieved by entering each economic transaction into a set of books.  The books are formatted to reflect the balance sheet and income statement items.  The chart [...]

Internal Revenue Service (IRS) Definition of an Expense


The Internal Revenue Service defines a business expense as ‘ordinary’ and ‘necessary’.  Ordinary expenses are those costs typically incurred in your industry.  So a restaurant would not ordinarily purchase vaccines.  And a medical [...]