Month: July 2017

Bookkeeping – Adjusting Journal Entries (Lesson 67)

One of the many tasks for bookkeeper in their daily operations is reconciling accounts including bank accounts, accounts receivable, accounts payable and many others.   Invariably, the balances are off and need adjusting.   To reset or balance the account the bookkeeper must use an adjusting journal entry.                  ...

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Bookkeeping – Complex Entries Expanded (Lesson 66)

A journal entry with multiple lines of entry affecting several different ledgers (accounts) is commonly referred to as a complex entry.   Many bookkeepers shy away from them as they feel intimidated by the difficulty involved and do not want to make an error.   This lesson helps the bookkeeper understand how to break the complex...

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Bookkeeping – Recurring Entries (Lesson 65)

Every day bills arrive from vendors that are mere repetition like the electric or phone bill.   They basically recur every so often (mostly monthly).   The bookkeeper must create a new entry as a part of his/her  daily functions.   This repetition consumes time and is a nuisance.   In addition, because they repeat so frequently, bookkeepers often...

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Bookkeeping – Charitable Giving (Lesson 64)

non profit work

Many small business owners are actively involved in the community and thus donate time and money to their favorite cause.   In almost every case the owner believes the donation is a business deduction.     It is NOT a business deduction for tax purposes except under the C-Corporation status; however, the business is still...

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Accounts Receivable Turnover Ratio

One of the activity ratios in business is the receivables turnover ratio or rate.   This ratio measures the frequency of collecting the entire balance of accounts receivable during a standard accounting year.   The ideal turns rate is twelve with a higher value indicating an aggressive collection process.   A lower value is a warning about accounts …

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Bookkeeping – Other Transportation Costs (Lesson 63)

There is much more to transportation with bookkeeping than accounting for vehicle operations, addressing mileage reimbursements or tracking auto costs related to owners and family members.   Bookkeepers must track the following too: A) Parking and Tolls B) Use of Rental Vehicles C) Travel Including Lodging and Meals Many new bookkeepers and accountants believe that auto leases...

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Bookkeeping – Auto Costs Related to Owners and Family Members (Lesson 62)

In the prior two lessons actual costs and mileage reimbursements were explained.  In addition, I identified that owners, directors, family members and key personnel are treated differently related to auto expenses.  Why?   The Internal Revenue Service scrutinizes expenses that can and often are benefits to owners.   The most common benefit is the use of a company...

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Bookkeeping – Mileage Reimbursement (Lesson 61)

Some small businesses manage transportation costs in incremental payments by utilizing mileage reimbursement.   It is a very advantageous system if used correctly.   Other small businesses augment their existing vehicle fleet by paying employees via mileage reimbursement for the use of the employee’s automobile.   Some simply take advantage of the tax benefit of the mileage...

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